- Controversies surround PayPal’s new stablecoin.
- The crypto community discusses the fear of Ethereum becoming a centralized platform.
- Ethereum enthusiasts discuss the potential of collaboration with PayPal in boosting Ethereum.
PayPal’s recent innovation, the PYUSD, has the potential to skyrocket Ethereum to the position of a money layer of the internet, as the new stablecoin belonging to PayPal is Ethereum based.
However, this new stablecoin is seemingly a bittersweet one for the crypto market, as Ethereum could be the only platform benefiting from it, as it could help it find its place in mainstream adoption, yet, this new stablecoin could potentially cause significant disruption in decentralization and personal control of assets.
Ethereum’s opponents argue that the collaboration between PayPal and Ethereum has the potential to become a poorly designed central bank digital currency.
The newly launched stablecoin was issued by Paxos Trust Co., the platform behind Binance USD, and is built on Ethereum, wholly designed to facilitate digital payments and web 3. PayPal has announced that the newly launched stablecoin, PYUSD, will soon be made available to their customers in the US.
The crypto space is buzzing with the knowledge that this launch could serve as a boost for Ethereum Adoption, with Ethereum enthusiasts like Ryan Sean Adams and Anthony Sassano admitting that they believe the ERC-20 stablecoin can push Ethereum closer to mainstream adoption.
Currently, Ethereum boasts between 300-400 thousand active users daily. At the same time, PayPal has an active user base of 430 million accounts, 5% of the world’s population, a population that could cross over onto Ethereum’s community through its collaboration with PayPal with PYUSD.
The CEO and Co-founder of Gnosis also shared that he believes that launching PYUSD on Ethereum’s base layer would enable PYUSD to interact with Ethereum’s Layer-2s.
While a part of the crypto community is against this recent development, others, with the inclusion of lawmakers, are viewing it as another example of big institutions working with the crypto community and bringing new systems into traditional payment systems. The other side is not entirely convinced about this development, smart contract auditors are highlighting the disadvantages, including the fact that the PYUSD smart contract contains “freeze-funds and wipefrozenfunds,” supposedly textbook indications of centralization attack vectors in solidity contracts.
The concern by the smart contract auditors has also been raised by cryptocurrency researcher Chris Belc who is of the belief that PayPal will make use of the problematic functions when necessary. Digital asset lawyer, Sarah Holder, believes the new stablecoins have characteristics similar to that of a censorship-enabled central bank digital currency.
Conclusion
In addition, another smart contract auditor brought up the possibility of PayPal changing the PYUSD smart contract at a whim. The crypto community also brought up Paypal’s past controversies, like their policy from October 2022, which would see users fined $2,500 for spreading misinformation. They eventually claimed the policy had been made in error.
