The co-founder of Tether, William Quigley discerned that Paypal’s stablecoin (PYUSD) is unlikely to bring much innovation into the industry.
“I don’t think much innovation will come from PayPal,” said William in an interview. He further added that PYUSD will be beneficial for the payment company, but it will not pass on many benefits to end users.
Tether’s co-founder revealed that PayPal had been looking into stablecoin for over eight years as it saw a potential opportunity to benefit from many multicurrency transactions carried out by a massive user base.
William explained that Issuing stablecoin involves holding fiat currencies in bank accounts. These currencies are further tokenized outside the banking system which is entitled to any tolls from the traditional finance market.
While transactions take place on a private blockchain, excluding the banking system or payment networks such as Visa, PayPal gets the most benefit out of it.
“PayPal can continue to assess consumers’ and merchants’ currency conversion fees on each transaction even though it no longer incurs those fees, and retain 100% of those fees as profit,” William said, “Or, it can eliminate the currency conversion charges it has heretofore assessed its customers and lower their overall cross-border transaction costs.”
William left Tether in 2015 while he was also an early investor in PayPal. He no longer holds any stake in PayPal as of now.
PayPal launched PYUSD stablecoin in August which has gained significant traction into the crypto industry. The USD backed stablecoin is launched on Ethereum and it has been integrated by leading crypto exchanges including Coinbase and Huobi.
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