7 ms·

PayPal Launches U.S. Dollar Stablecoin

49 points by plingamp 3y ago

Gormisdomai 3y ago
I wasn’t sure if paypal-corp was a legit webpage for paypal. Here’s a Reuters article confirming the story https://www.reuters.com/technology/paypal-launches-stablecoin-crypto-push-2023-08-07/ https://www.reuters.com/technology/paypal-launches-stablecoi...
- kelvie 3y ago
  Yeah paypal-corp.com screams phishing address, what were they thinking?
  - nailer 3y ago
    Same as withgoogle.com, and official site that also looks like a phishing site
    - lesuorac 3y ago
      withgoogle.com is so that the google.com cookies & etc aren't provided. i.e. any vulnerability with withgoogle.com doesn't affect google.com. It could very well be the same idea for paypal where they're worried that whoever is in charge of the newsroom will have a vulnerability.
  - thumbuddy 3y ago
    It's cryptocurrency... Gotta get the users comfortable with sketchy from the get go so when all their cash is gone they at least aren't too surprised.
- botanical 3y ago
  Not to mention this link on the page that uBlock disallows: https://c212.net/c/link/?t=0&l=en&o=3937494-1&h=2086543002&u=http%3A%2F%2Fwww.paypal.com%2Fpyusd&a=PayPal+USD https://c212.net/c/link/?t=0&l=en&o=3937494-1&h=2086543002&u...
matt3210 3y ago
Who else read PYUSD as "pie-usd" intuiting something like "Python USD"... "pip install pyusd"
- Melting_Harps 3y ago
  > Who else read PYUSD as "pie-usd" intuiting something like "Python USD"... "pip install pyusd" Honestly? Probably no one, but I like here your head is going; money as code is something that we in the Bitcoin community have been advocating since it's inception. People need to understand that money has to evolve, and that the current system is as archaic as the massive computing machines that occupied entire warehouses in comparison to where we are in terms of computing power and advancement. If seen from a purely technological lens: fiat is a Luddite's folly. Personally, I think that the stablecoin behind Paypal must be seen in the same lens as Zuckbucks (Libra) but it is shifting the POV that the majority 85% of the population that you can in fact have systems which not only allows for 24/7 transactions (I doubt Thiel-bucks will be seamless given my experience with Paypal mafia) but they also allow for Bitcoin to enter as the leader of the paradigm shift. Honestly, if Thiel has done it as this point--an entrenched fossil in terms of fintech--you HN stragglers need to realize that this is where money is going, whether you like it or not at this point. Web 3.0 and NFT BS always were VC's COVID rug pull, cash grab with cheap money; however, that doesn't mean the underlying tech we've built isn't sound and slowly taking over the financial system (the way some of us in this for 10+ years always wanted it) as Blackrock, who has more assets under management than God, is getting close to it's Bitcoin ETF and the SEC saying anything but Bitcoin is a security etc... With that said, I honestly envision a World with competing non-nation State fiat currencies is now inevitable; Global inflation is now at unpayable levels and will continue to de-value as the Geo-political and environmental situation intensifies, despite our best attempts. What becomes of this is where the real experimental design runs at it's simulation limits, so it will be interesting to see what happens from here.
  - bbstats 3y ago
    I read it that way! :)
  - bemusedthrow75 3y ago
kelseyfrog 3y ago
Has there ever been a USD stable coin that hasn't imploded? Or in other words, what's the mean time to failure?
- schemescape 3y ago
  Well, Tether hasn’t imploded (much to my surprise). Are you thinking of algorithmic stablecoins?
  - kelseyfrog 3y ago
    Just an honest question. I'm not terribly familiar with the space, so I'm happy to be shown a counter example. Thank you
    - postcynical 3y ago
      Fiat backed (hopefully :-): USDT, USDC, PAX Dollar (by paxos the same company behind pyusd) Crypto backed: DAI, LUSD (backed by ETH), crvUSD, FRAX EURO based (with full e-money licenses): EURe (monerium.com), EUROe (euroe.com)
      - deleted 3y ago
        [deleted]
      - ghiculescu 3y ago
        Maybe a dumb question but what’s the point of a fiat backed coin? Is it a faster Venmo?
        simple-thoughts 3y ago
        It’s programmable, meaning you can use it for smart contracts. A common smart contract use case is dex smart contracts that let you swap between other cryptos and usd without any counterparty risk.
janejeon 3y ago
This seems like yet another ERC-20 stablecoin with no special "quirks", from a quick reading. My question is, what is the reason for this to exist over existing stablecoins that have much broader acceptance and long history (for crypto anyway), e.g. USDC/USDT?
- happytiger 3y ago
  Oh, they exist so they can throw their peg and crash losing 99 percent of their value while the company or individuals responsible tell their users not to worry and that it is totally under control.
  - mptest 3y ago
    for a company like this, the real reason is because you can give users 0% return while on the backend actually making return with their money, same as any "bank" that holds usd. for people like do kwon and sbf, and many others I probably don't know about, what you said
    - JumpCrisscross 3y ago
      > same as any "bank" that holds usd Banks are competing for deposits; this rate pressure is already hitting earnings. And they take maturity-transformation risk. PayPal has found ersatz depositors without depositor protections who will accept zero yield in a high-yield environment. They could literally just roll into Treasury bills and overnight funding and ink a decent profit.
- thumbuddy 3y ago
  So someone else can make a ton of money by manipulating and artificial and most importantly unregulated market. IE why cryptocurrency exists at all.
  - robertlagrant 3y ago
    That's not why it exists. It's why there are so many scams.
onetokeoverthe 3y ago
[dead]
spicybright 3y ago
Is there a real use case for this, or is it just to cash in on the crypto market? I ask because crypto transfer fees for bitcoin/eth are ridiculous if you're not transferring thousands of dollars at a time. And if paypal is the one exchanging/holding your USD, crypto or not, why pay that fee?
- ETH_start 3y ago
  The fees are not exorbitant: https://l2fees.info/ https://l2fees.info/
- MagicMoonlight 3y ago
  If paypal can make these "gold coins" look like real coins then they can freely mint their own coins and trade them for real assets. When people cut them open and find that they are made of lead then it will be too late, the owners will be long gone. It also lets them take real money off you and give you casino chips that you can send around. The chips are meaningless so they never actually have to give your real money back as long as they stay in the casino. If you do ask for them back, they've been collecting interest on them the whole time so they'll double up either way.
  - tock 3y ago
    > When people cut them open and find that they are made of lead then it will be too late, the owners will be long gone. This isn't true. This is regulated. PayPal will be required to back this 1-1 with cash and treasury bonds. Unless you're saying that PayPal will commit fraud. > If you do ask for them back, they've been collecting interest on them the whole time so they'll double up either way. Yes stablecoins are in my opinion one of the most lucrative ideas right now. They can make billions just from treasury yields if they capture a large share of the market.
- 3np 3y ago
  Even if you disregard L2 (Lightning), an on-chain Bitcoin transfer is still usually <$1 (sometimes substantially so and at times not; it is volatile).
- 3y ago
Ekaros 3y ago
Why would I want something that is even less money than if I had money in Paypal?
- mistrial9 3y ago
  you do not, it is useful for contracts between payments companies, and directly increases the assets of PayPal Corp. Basically you are a pebble on the beach, and these people want to create new kinds of automatable sand-movers.
HtmlProgrammer 3y ago
> As the only stablecoin supported within the PayPal network Will it eventually be the case that these platforms start throwing anti competitive lawsuits at each other for not supporting THEIR stable coin? It’s a smart move by PayPal anyway, people funnel their dollars to them, they collect a nice little interest payment via bonds.
MagicMoonlight 3y ago
If it was actually "backed by deposits" then you wouldn't need it. You would simply transfer those "deposits" around. So what they're actually doing is bypassing banking legislation and attempting to do fractional reserve banking with no licence. They're also trying to bypass official currency and counterfeit their own shit. People need to start doing time for this because it is ridiculous that these clowns think they can just skip past a thousand years of legislation. Minting your own coins? People used to get beheaded for this.
- yrhrodka 3y ago
  [flagged]
- matthewdgreen 3y ago
  The currency is regulated by NYDFS which has specific regulations for how stablecoins must be backed. TL;DR: 1:1 backing by T-bills and deposit accounts at regulated banks. There is certainly fractional reserve banking going on within those depository banks, but not specifically by PayPal. https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220608_issuance_stablecoins https://www.dfs.ny.gov/industry_guidance/industry_letters/il...
xhkkffbf 3y ago
Some people have found some interesting "features" in the code like the ability to "freeze" accounts and then empty them completely. https://twitter.com/pashovkrum/status/1688591468498239496 https://twitter.com/pashovkrum/status/1688591468498239496 Is this something that's necessary? Or is it just very dangerous.

49 points by plingamp 3y ago

I wasn’t sure if paypal-corp was a legit webpage for paypal. Here’s a Reuters article confirming the story https://www.reuters.com/technology/paypal-launches-stablecoin-crypto-push-2023-08-07/ https://www.reuters.com/technology/paypal-launches-stablecoi...

kelvie 3y ago
Yeah paypal-corp.com screams phishing address, what were they thinking?
- nailer 3y ago
  Same as withgoogle.com, and official site that also looks like a phishing site
  - lesuorac 3y ago
    withgoogle.com is so that the google.com cookies & etc aren't provided. i.e. any vulnerability with withgoogle.com doesn't affect google.com. It could very well be the same idea for paypal where they're worried that whoever is in charge of the newsroom will have a vulnerability.
- thumbuddy 3y ago
  It's cryptocurrency... Gotta get the users comfortable with sketchy from the get go so when all their cash is gone they at least aren't too surprised.
botanical 3y ago
Not to mention this link on the page that uBlock disallows: https://c212.net/c/link/?t=0&l=en&o=3937494-1&h=2086543002&u=http%3A%2F%2Fwww.paypal.com%2Fpyusd&a=PayPal+USD https://c212.net/c/link/?t=0&l=en&o=3937494-1&h=2086543002&u...

matt3210 3y ago

Who else read PYUSD as "pie-usd" intuiting something like "Python USD"... "pip install pyusd"

Melting_Harps 3y ago
> Who else read PYUSD as "pie-usd" intuiting something like "Python USD"... "pip install pyusd" Honestly? Probably no one, but I like here your head is going; money as code is something that we in the Bitcoin community have been advocating since it's inception. People need to understand that money has to evolve, and that the current system is as archaic as the massive computing machines that occupied entire warehouses in comparison to where we are in terms of computing power and advancement. If seen from a purely technological lens: fiat is a Luddite's folly. Personally, I think that the stablecoin behind Paypal must be seen in the same lens as Zuckbucks (Libra) but it is shifting the POV that the majority 85% of the population that you can in fact have systems which not only allows for 24/7 transactions (I doubt Thiel-bucks will be seamless given my experience with Paypal mafia) but they also allow for Bitcoin to enter as the leader of the paradigm shift. Honestly, if Thiel has done it as this point--an entrenched fossil in terms of fintech--you HN stragglers need to realize that this is where money is going, whether you like it or not at this point. Web 3.0 and NFT BS always were VC's COVID rug pull, cash grab with cheap money; however, that doesn't mean the underlying tech we've built isn't sound and slowly taking over the financial system (the way some of us in this for 10+ years always wanted it) as Blackrock, who has more assets under management than God, is getting close to it's Bitcoin ETF and the SEC saying anything but Bitcoin is a security etc... With that said, I honestly envision a World with competing non-nation State fiat currencies is now inevitable; Global inflation is now at unpayable levels and will continue to de-value as the Geo-political and environmental situation intensifies, despite our best attempts. What becomes of this is where the real experimental design runs at it's simulation limits, so it will be interesting to see what happens from here.
- bbstats 3y ago
  I read it that way! :)
- bemusedthrow75 3y ago

kelseyfrog 3y ago

Has there ever been a USD stable coin that hasn't imploded? Or in other words, what's the mean time to failure?

schemescape 3y ago
Well, Tether hasn’t imploded (much to my surprise). Are you thinking of algorithmic stablecoins?
- kelseyfrog 3y ago
  Just an honest question. I'm not terribly familiar with the space, so I'm happy to be shown a counter example. Thank you
  - postcynical 3y ago
    Fiat backed (hopefully :-): USDT, USDC, PAX Dollar (by paxos the same company behind pyusd) Crypto backed: DAI, LUSD (backed by ETH), crvUSD, FRAX EURO based (with full e-money licenses): EURe (monerium.com), EUROe (euroe.com)
    - deleted 3y ago
      [deleted]
    - ghiculescu 3y ago
      Maybe a dumb question but what’s the point of a fiat backed coin? Is it a faster Venmo?
      - simple-thoughts 3y ago
        It’s programmable, meaning you can use it for smart contracts. A common smart contract use case is dex smart contracts that let you swap between other cryptos and usd without any counterparty risk.

janejeon 3y ago

This seems like yet another ERC-20 stablecoin with no special "quirks", from a quick reading. My question is, what is the reason for this to exist over existing stablecoins that have much broader acceptance and long history (for crypto anyway), e.g. USDC/USDT?

happytiger 3y ago
Oh, they exist so they can throw their peg and crash losing 99 percent of their value while the company or individuals responsible tell their users not to worry and that it is totally under control.
- mptest 3y ago
  for a company like this, the real reason is because you can give users 0% return while on the backend actually making return with their money, same as any "bank" that holds usd. for people like do kwon and sbf, and many others I probably don't know about, what you said
  - JumpCrisscross 3y ago
    > same as any "bank" that holds usd Banks are competing for deposits; this rate pressure is already hitting earnings. And they take maturity-transformation risk. PayPal has found ersatz depositors without depositor protections who will accept zero yield in a high-yield environment. They could literally just roll into Treasury bills and overnight funding and ink a decent profit.
thumbuddy 3y ago
So someone else can make a ton of money by manipulating and artificial and most importantly unregulated market. IE why cryptocurrency exists at all.
- robertlagrant 3y ago
  That's not why it exists. It's why there are so many scams.

onetokeoverthe 3y ago

[dead]

spicybright 3y ago

Is there a real use case for this, or is it just to cash in on the crypto market? I ask because crypto transfer fees for bitcoin/eth are ridiculous if you're not transferring thousands of dollars at a time. And if paypal is the one exchanging/holding your USD, crypto or not, why pay that fee?

ETH_start 3y ago
The fees are not exorbitant: https://l2fees.info/ https://l2fees.info/
MagicMoonlight 3y ago
If paypal can make these "gold coins" look like real coins then they can freely mint their own coins and trade them for real assets. When people cut them open and find that they are made of lead then it will be too late, the owners will be long gone. It also lets them take real money off you and give you casino chips that you can send around. The chips are meaningless so they never actually have to give your real money back as long as they stay in the casino. If you do ask for them back, they've been collecting interest on them the whole time so they'll double up either way.
- tock 3y ago
  > When people cut them open and find that they are made of lead then it will be too late, the owners will be long gone. This isn't true. This is regulated. PayPal will be required to back this 1-1 with cash and treasury bonds. Unless you're saying that PayPal will commit fraud. > If you do ask for them back, they've been collecting interest on them the whole time so they'll double up either way. Yes stablecoins are in my opinion one of the most lucrative ideas right now. They can make billions just from treasury yields if they capture a large share of the market.
3np 3y ago
Even if you disregard L2 (Lightning), an on-chain Bitcoin transfer is still usually <$1 (sometimes substantially so and at times not; it is volatile).
3y ago

Ekaros 3y ago

Why would I want something that is even less money than if I had money in Paypal?

mistrial9 3y ago
you do not, it is useful for contracts between payments companies, and directly increases the assets of PayPal Corp. Basically you are a pebble on the beach, and these people want to create new kinds of automatable sand-movers.

HtmlProgrammer 3y ago

> As the only stablecoin supported within the PayPal network Will it eventually be the case that these platforms start throwing anti competitive lawsuits at each other for not supporting THEIR stable coin? It’s a smart move by PayPal anyway, people funnel their dollars to them, they collect a nice little interest payment via bonds.

MagicMoonlight 3y ago

If it was actually "backed by deposits" then you wouldn't need it. You would simply transfer those "deposits" around. So what they're actually doing is bypassing banking legislation and attempting to do fractional reserve banking with no licence. They're also trying to bypass official currency and counterfeit their own shit. People need to start doing time for this because it is ridiculous that these clowns think they can just skip past a thousand years of legislation. Minting your own coins? People used to get beheaded for this.

yrhrodka 3y ago
[flagged]
matthewdgreen 3y ago
The currency is regulated by NYDFS which has specific regulations for how stablecoins must be backed. TL;DR: 1:1 backing by T-bills and deposit accounts at regulated banks. There is certainly fractional reserve banking going on within those depository banks, but not specifically by PayPal. https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220608_issuance_stablecoins https://www.dfs.ny.gov/industry_guidance/industry_letters/il...

xhkkffbf 3y ago

Some people have found some interesting "features" in the code like the ability to "freeze" accounts and then empty them completely. https://twitter.com/pashovkrum/status/1688591468498239496 https://twitter.com/pashovkrum/status/1688591468498239496 Is this something that's necessary? Or is it just very dangerous.