PayPal Launches Stablecoin, But is it Safe?
• PayPal recently announced the launch of its stablecoin, PYUSD, backed by US dollars.
• The development received mixed reactions from the crypto community, with some questioning its centralization and security.
• Despite the controversy, exchanges including Huobi and BitSmart have rushed to list the token on their platforms.
PayPal Launches Stablecoin
PayPal recently announced the launch of its stablecoin digital currency backed by US dollars – known as PayPal USD (PYUSD). The token is intended for utilization in transactions within its global online payments platform and is issued by Paxos Trust Company.
Mixed Reactions to Launch
The development received mixed reactions from the crypto community. Many saw it as a validation from a large FinTech company which is good news for the industry. Cryptocurrency exchanges such as Huobi and BitSmart rushed to list the token on their platforms. However, others raised questions about PYUSD’s centralization and security aspects.
Centralization & Security Concerns
There are several issues concerning PayPal’s approach with their internal stablecoin project. As issuer, Paxos allegedly retains authority to freeze or seize assets of any holder under government directives which undermines decentralized solution that cryptocurrency should offer. Furthermore, there is worry over PayPal’s history of freezing customer funds – last year they issued a policy to fine customers $2,500 for posting “misinformation” online which was later withdrawn due to backlash.
Despite being able to move money across borders quickly with low fees using PYUSD, users should take precautions when utilizing this new venture given potential risks related to centralization and security concerns surrounding it.
Overall, while there are pros associated with PayPal launching a stablecoin backed by US dollars – convenience and low costs – it is important for users to weigh up these benefits against potential drawbacks before investing in this new venture given current allegations involving centralization and security matters surrounding it.