Tether refers to Paypal's stable currency PYUSD to grab the US advantage
Tether's CTO, Paolo Ardoino, stated in an interview with Benzinga that he does not see PYUSD as a competitor to Tether, but rather as a challenge to competitors like Circle's USD Coin (USDC). However, he acknowledged that PayPal's stablecoin PYUSD has an advantage in the US market in terms of competing with other stablecoins.
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Ardoino mentioned, "It's interesting, another stablecoin from the US. This could lead to a decrease in revenue for major payment processors like Mastercard and Visa, while also driving further industry growth and promoting reasonable regulation... This could mean that our competition (in the US) will further decline as they focus more on the US market." Ardoino also added that PYUSD could pose issues for US-centric stablecoins like USDC that rely on the US market, while Tether primarily focuses on emerging markets outside the US.
PYUSD, launched by PayPal, is a stablecoin backed by deposits in US dollars, short-term US Treasury bonds, and other cash equivalents. According to PayPal's blog post, this stablecoin can be exchanged 1:1 with the US dollar and is issued by the crypto company Paxos.
PayPal states that PYUSD is designed to reduce friction in digital payments and facilitate fast cross-border transactions. However, Maxine Waters, a Democratic member of the US House Financial Services Committee, expressed concerns about PayPal's PYUSD, stating that the lack of proper regulatory framework could pose risks to investor protection. In contrast, Republican leaders have indicated that this stablecoin demonstrates the potential for regulatory clarity.
The differences between Democrats and Republicans regarding stablecoin legislation highlight divergent views on regulating stablecoins. The House Financial Services Committee passed the Clarity for Payment Stablecoins Act on July 28, sending it for a full House vote. However, Maxine Waters mentioned in a statement that due to partisan divisions on stablecoin legislation, the bill "has no chance of becoming law in its current form." She called for further negotiations between Democratic and Republican lawmakers.
Patrick McHenry, the Chairman of the Financial Services Committee, stated on August 7 that PayPal's PYUSD stablecoin could bring hope for future payment methods if established under a clear regulatory framework. He urged the passage of the Clarity for Payment Stablecoins Act, but the bill has seen no progress since July 27.
With the launch of PYUSD, the cryptocurrency market will further develop, and there will be increased industry demand for reasonable regulation. The success of PYUSD will be a focal point of industry attention and will have profound implications for competitors' prospects.