The launch of the PayPal USD stablecoin will increase the efficiency of payments and improve the customer experience, but the adoption of the asset is unlikely to be widespread, analysts at Bank of America said.
“Long term, we expect PYUSD to face additional adoption challenges as competition from central bank digital currencies (CBDCs) and high-yielding stablecoins intensifies,” the analysts wrote.
It doesn’t matter to investors which stablecoins to hold as long as the assets are “deemed safe and available on major trading floors,” according to a report from one of the largest US banks.
Bank of America does not expect the launch of PYUSD to lead to “accelerated regulatory clarity” as the issuance of the stablecoin “does not change systemic risk for traditional markets.” However, a stablecoin could face regulatory hurdles if non-banks are eventually banned from issuing such stablecoins.
Payments giant PayPal recently announced that it is entering the cryptocurrency market for the first time with its own dollar-pegged coin, PayPal USD. The Ethereum network-based token will be available first on PayPal and later on Venmo, and can be exchanged for dollars at any time. The company introduced a cryptohub that allows selected users to store cryptocurrency and conduct transactions.
It has recently become known that scammers are trying to trick unsuspecting users into profiting from PayPal USD. More than 60 fake PYUSD have already appeared on the network.
