PayPal launches PYUSD stablecoin for payment (cointelegraph.com)

submitted 1 year ago by tracyspcy@lemmy.ml to c/crypto@lemmy.ml

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[-] max@nano.garden 4 points 1 year ago

Ah, it's always in the small-text (Note [2] at the bottom of https://www.paypal.com/us/digital-wallet/manage-money/crypto/pyusd):

PayPal Balance account required to access cryptocurrency. When you buy or sell cryptocurrency, including when you check out with crypto, we will disclose an exchange rate and any fees you will be charged for that transaction. For currencies other than PYUSD, the exchange rate includes a spread that PayPal earns on each purchase and sale. Learn more about cryptocurrency fees.

So, it is not clear to me whether you would be able to exchange monero for PYUSD in some non-KYC exchange, but from this I gather that the only way to actually pay a vendor using PYUSD would be to have a PayPal account that is tied to your identity.

Furthermore, their smart contract has a built-in "asstProtectionRole" that allows them to uni-laterally freeze the balance in any account.

You can find the read-me in their github project here: https://github.com/paxosglobal/pyusd-contract

Here is an excerpt:

Asset Protection Role

Paxos Trust Company is regulated by the New York Department of Financial Services (NYDFS). As required by the regulator, Paxos must have a role for asset protection to freeze or seize the assets of a criminal party when required to do so by law, including by court order or other legal process.

The assetProtectionRole can freeze and unfreeze the PYUSD balance of any address on chain. It can also wipe the balance of an address after it is frozen to allow the appropriate authorities to seize the backing assets.

Freezing is something that Paxos will not do on its own accord, and as such we expect to happen extremely rarely. The list of frozen addresses is available in isFrozen(address who).

You can see the actual function here.

I don't see this as much of an improvement over using PayPal and a bank. Maybe it can be useful if you want to move crypto into an asset that you can pay with in regular online purchases without going through an exchange. But PayPal will still play the role of the intermediary that knows you. Storing value in an asset that can be frozen by PayPal is absolutely not desirable. So I think that this coin is kind of a gimmick.

But it could have a positive influence in that online vendors might become more accustomed to accepting crypto payments, and it could help adoption in the long run. Let's hope.

[-] tracyspcy@lemmy.ml 3 points 1 year ago

was surprised that it is also under paxos whitelabel solution, same as busd.
as for freezing accounts, it became common among centralized stablecoins.

[-] max@nano.garden 1 points 1 year ago

as for freezing accounts, it became common among centralized stablecoins

Yeah, from what they have written It appears like this is necessary feature to comply with regulations.

I am thinking about how I might be able to get a practical use out of PYUSD. Maybe if I kept all of my assets in crypto, then it might be useful to be able to get PYUSD and pay using a paypal account. But I have a lot more fiat than crypto available, and by using PYUSD I lose most if not all of the benefits associated with a crypto payment - plus gas fees. So I don't see why I would chose this option over a normal fiat transfer.

I guess I'm having trouble wrapping my head around the real use case. Is this more than a marketing gimmick?

[-] tracyspcy@lemmy.ml 2 points 1 year ago

Idk about practical use of stablecoins outside of speculations. Probably paypal just covering niche without any clear understanding just because stablecoins under the hood is very similar to paypal , just using different rails

[-] max@nano.garden 2 points 1 year ago

Probably paypal just covering niche without any clear understanding just because stablecoins under the hood is very similar to paypal , just using different rails

Yes, that is what it looks like to me.

The thing is... it would take such a small modification to this system to change the world. If PayPal were to implement this such that the PayPal payment can be made by transferring the crypto into the seller's account directly and anonymously without the buyer having a PayPal Balance account, and then PayPal is willing to exchange the seller's PYUSD for fiat directly on the site, this would be such a significant step in the crypto revolution.