William Quigly, Co-Founder of Tether – the issuer of the USDT – believes that PayPal’s recently launched stablecoin PYUSD will not bring ‘much innovation’ to the stablecoin sector.
Speaking to CoinDesk, Quigley spoke openly about the release of PYUSD and his views on PayPal’s intentions behind the stablecoin.
He shared: “I don’t think much innovation will come from PayPal. I think PayPal will see this principally as a cost saving. They may or may not pass on a portion of that to their end users.”
Tether’s USDT is comfortably the largest stablecoin on the market, followed by Circle’s USDC. However, PayPal’s PYUSD possesses the ability to disrupt the market due to the financial service’s overwhelming size.
PYUSD will be primarily used to be exchanged for its fiat currency counterpart, as well as to buy and sell other cryptocurrencies, as well as to include being compatible with other PayPal external wallets, a vehicle for person-to-person transactions and to fund various purchases.
Quigly acknowledges that PayPal – in whom he was an investor – and other private stablecoin issuers are a “benefit to society” and broke down how tokens like PYUSD can possess benefits for cross-border transactions.
He said: “All transactions are now done on its private blockchain outside of the Visa network and the banking system. There are no financial intermediaries anymore – just PayPal.
“There is no third-party FX intermediary taking margin because real currency is not being swapped. It’s just one token being exchanged for another. There’s no FX or interchange fee.”
“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. Or, it can eliminate the currency conversion charges it has heretofore assessed its customers and lower their overall cross-border transaction costs.”
Upon the launch of PYUSD, Jose Fernandez da Ponte, SVP, Blockchain, Crypto and Digital Currencies at PayPal, dismissed competition claims, rather, explaining that the stablecoin is looking to ‘enlarge the pie’.
He stated: “We don’t think of the goal in terms of competition. We do think that we are still very early in crypto and definitely very early in stablecoins.
“This is going to be all about enlarging the pie. We see the appetite from users who want alternatives and a market that is less concentrated and we think we have a place in that market, we expect what this will do is to increase the pie and the move towards stablecoins.”