PayPal’s new PYUSD stablecoin faces legal headwinds and ‘less functionality’

cointelegraph.com:

Although a clear regulatory framework for digital assets has yet to be established in the United States, PayPal — one of America’s largest financial technology companies — announced on Aug. 7 its U.S. dollar-pegged payment stablecoin, PayPal USD (PYUSD). 

A PayPal spokesperson told Cointelegraph that PYUSD is important because mainstream adoption of future digital experiences will require a stable digital instrument that is crypto-native and easily connected to fiat. Despite the unclear regulatory environment for digital assets in the U.S., the spokesperson said:

The case for PayPal’s ability to affect stablecoin adoption with its new project is strong, as recent statistics show that over 426 million PayPal accounts are currently actively used. The company also has a market share of just over 50% of the global online payment processing arena.

While it’s certainly notable that PayPal has launched PYUSD, there are several considerations to keep in mind.

Alex Tapscott, the co-founder of the Blockchain Research Institute and a business author, told Cointelegraph that PayPal clearly understands that stablecoins will be foundational to the future of financial services and payments in particular. He said stablecoins have already proven incredibly lucrative as a business:

However, there are both advantages and disadvantages that will likely arise with PYUSD. One of the most obvious benefits is that PYUSD may help onboard mainstream users to the Web3 space.

“The biggest advantage of PYUSD is that it is more likely to get integrated into our digital economy as a payments tool that everyday people can use,” said Tapscott.

To put this in perspective, Pegah Soltani, head of payments products at Ripple, told Cointelegraph that stablecoins