PYUSD, good for the ETH network? This was the news that made the headlines at the start of this week: this August 7, 2023, PayPal announced launch your own dollar house stablecoinTHE PYUSDwith the help of Paxos. If this stablecoin is likely to present significant problems of centralizationanalysts of the multinational banking JP Morgan are, however, optimistic Ethereum Adoption Support (ETH) that the PYUSD represents.
Will PayPal customers join the ranks of Ethereum users?
Since the electronic payments giant PayPal decided to get into the cryptocurrency business, he kept diving deeper into it. The launch of PYUSDits own dollar stablecoin, is clearly a milestone in this group’s advancements within cryptoassets.
But in addition to benefiting the interests of PayPal, the experts of the mega-bank JP Morgan also believe that this new stablecoin could also be beneficial to the network Ethereum. As reported by The Block, the chief strategy officer and chief analyst at JP Morgan, Nikolaos Panigirtzoglouhas looked into the subject, and seems very confident for the future of the ETH blockchain.
” [Le PYUSD de PayPal] could boost activity on Ethereum, and improve the usefulness of the ETH network as a platform for stablecoins and DeFi (decentralized finance). (…) In other words, more companies would be encouraged in the future to choose the Ethereum blockchain (or its second-layer solutions) for their stablecoins and decentralized projects. »
Nikolaos Panigirtzoglou, Head of Strategy at JP Morrgan
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Transaction fees as a major obstacle?
Nikolaos Panigirtzoglou adds that PayPal’s PYUSD could also benefit from the scheduled extinction of Binance’s stablecoin BUSD (in February 2024). This would thus attract dollar stablecoins from the BNB Chain (main support for BUSD) to Ethereum.
But the JP Morgan analyst does well to mention the second layer solutions (layer 2) of Ethereum. Because the network co-founded by Vitalik Buterin suffers from a chronic saturation of its transactions, resulting of the gas fees (transaction fees) very high. To the point of becoming totally unacceptable for small transactions of a few dollars (because, for example, these exchange fees were $28 May 5, 2023, because of memecoin PEPE).
Thus, in view of a mass adoption and a number of users that could reach and then exceed one billion, the layer 2 of Ethereum are vital. At least until the ETH mainnet makes the necessary updates to improve its scalability. What else will take years development and implementation.
However, the stablecoin PYUSD should still any further popularize the Ethereum blockchain. At least from PayPal users, and maybe from other companies. Attention however, if you are interested in this new dollar stablecoin, unfortunately there is already dozens of fake PYUSD from scammers : stay alert!
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