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3 kinds of "dollars", actually: 1. the old school accounts we all know. 2. the PayPalUSD which, as this article explains, is saver and runs on the ETH blockcha
by janandonly 3y ago
3 kinds of "dollars", actually:
1. the old school accounts we all know.
2. the PayPalUSD which, as this article explains, is saver and runs on the ETH blockchain. Moreover, it appears to be trading at 0.99 cents to the dollar. That is an arbitrage opportunity right there.
3. The saving account with 0.85 APY and a federal covering of $250000.
> It would be illegal for PayPal to back its new crypto-based dollars with the assets listed above, yet for some reason it is fine if it backs its traditional dollars with them.
> The second drawback of PayPal's regular dollars is that the assets underlying them don't really "belong" to customers in any strong sense of the word. They belong to PayPal.
> To translate, the assets underlying your $1000 in PayPal USD cryptodollars are not PayPal's assets. Nor are they Paxos's. They are yours. No need to squabble with competing vultures for what's left.
> But oddly, PayPal is under no legal obligation to extend these very sensible protections to all of its regular PayPal dollars.
> the third type is insured by the government up to $250,000. PayPal Savings dollars also pay interest, whereas the first two don't, or are prohibited from doing so. PayPal offers this product in conjunction with a bank, Synchrony Bank, which means this third type of PayPal dollar conforms to an entirely different set or rules than the other two: Federal banking law.