William Quigley, a co-founder of Tether (USDT), recently stated in an interview with Cryptonews.com that it is highly unlikely that PayPal’s stablecoin will gain major adoption, particularly outside the United States. The crypto veteran and co-founder of WAX, one of the world’s largest entertainment NFT networks, believes that stablecoins, like all cryptocurrencies, are judged by their performance across market cycles. As such, PayPal’s stablecoin will need to earn the confidence of the crypto community in order to make a mark in the stablecoin market.
PayPal announced in August that it is rolling out its PYUSD stablecoin soon. This dollar-pegged asset is issued by Paxos, a blockchain infrastructure firm that used to issue Binance USD (BUSD) stablecoin. Currently, Tether is the largest and most liquid of the dollar-pegged tokens, followed by Circle’s USD Coin (USDC). However, there is still a chance that PayPal’s stablecoin will overtake them due to its user base of 420 million.
Quigley commented that there would be regulatory challenges for PayPal, as compliance costs remain high within the cryptocurrency market. He further noted that in five years, we will be able to evaluate the success of PayPal’s stablecoin should it still be in the stablecoin business with a competitive fee structure.
Stablecoins remain key to the day-to-day operations of the cryptocurrency industry, acting as a bridge between traditional finance and cryptocurrencies. Tether, with a market cap exceeding $80 billion, is the most traded cryptocurrency on earth and alone accounts for more than half of all cryptocurrency trading volume. According to CoinMetrics, in 2022, stablecoins executed $7.4 trillion worth of transactions. This is higher than the volume of leading credit card companies such as Mastercard, American Express, and Discover.
Quigley believes that tokenized fiat, either in the form of stablecoins or central bank digital currencies (CBDCs), is one of the most significant developments in the history of money. He predicts that three or four of the largest economies in the world will have tokenized their fiat within the next couple of years. According to the Atlantic Council CBDC tracker, 98% of global GDP is currently exploring a CBDC, while 19 of the G20 countries are in the advanced stage of their CBDC development. 11 countries have already launched a CBDC, including China, The Bahamas, Nigeria, Anguilla, Jamaica, and seven Eastern Caribbean countries. However, the United States has no confirmed plans to launch a digital currency.
Overall, tokenized fiat is the future. Quigley questions whether the governments will allow private stablecoin, and whether Tether will be permitted from a regulatory perspective.
