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"PayPal recently announced the launch of its own stablecoin, PayPal USD (PYUSD), which is built in collaboration with Paxos on the Ethereum blockchain. This stablecoin will primarily be used on the PayPal platform and the social payment service Venmo, both of which are PayPal-owned. One of the main features of PYUSD is its ability to be converted into other cryptocurrencies offered on the PayPal platform and transferred to PayPal or external accounts.
In contrast, Circle has been offering its stablecoin, USD Coin (USDC), since 2018. Similar to PYUSD, USDC is built on the Ethereum blockchain and is fully backed by U.S. dollars held in reserve accounts. USDC is primarily designed for use on the Circle platform but can also be converted into other cryptocurrencies available on the platform and transferred to Circle or external accounts.
1. Development Differences:
- PYUSD is developed in collaboration with Paxos, while USDC is developed by Circle. These two companies are well-known in the cryptocurrency space and have been around for several years, but their approaches to stablecoin development differ slightly. For instance, PYUSD intends to release monthly attestations by independent third-party accounting firms in accordance with the standards set by the American Institute of Certified Public Accountants (AICPA). This stands in contrast to USDC, which undergoes regular audits by independent accounting firms, such as Grant Thornton, LLP, to verify that the circulating USDC tokens are fully backed by the corresponding amount of U.S. dollar reserves.
2. Intended Use:
- PYUSD is primarily designed for the PayPal platform and Venmo, making it more appealing to users of these services. USDC, on the other hand, is primarily designed for the Circle platform. This means that PYUSD may be more attractive to PayPal and Venmo users, while USDC may be more appealing to Circle users.
3. Transparency and Regulation:
- Both PYUSD and USD Coin are subject to regulatory oversight. For example, PYUSD is regulated by the New York State Department of Financial Services (NYDFS), and USD Coin is regulated by the U.S. Department of the Treasury. This means that both stablecoins must adhere to certain regulations and guidelines to ensure transparency and security.
4. Fees and Transaction Speed:
- One of the main advantages of stablecoins compared to traditional payment methods is their low fees and fast transaction speeds. Both PYUSD and USD Coin offer relatively low transaction fees compared to traditional payment methods. However, USD Coin has a slightly faster transaction speed compared to PYUSD. For users who require quick transaction times, this may be an important factor to consider.
5. Conclusion:
- In summary, stablecoins are becoming an increasingly popular choice for users who want to hold cryptocurrencies without being exposed to the price volatility of other cryptocurrencies. Both PYUSD and USDC are designed to provide long-term stable value and are easy to trade on their respective platforms. As with any investment, it's essential for users to conduct their own research and consider their needs and risk tolerance before deciding which stablecoin to use.
PYUSD:
- Developed in collaboration with Paxos
- Built on the Ethereum blockchain
- Fully backed by U.S. dollar deposits, U.S. Treasury securities, and other cash equivalents
- Smart contracts allow for the freezing and seizing of tokens
- Intends to release monthly attestations by independent third-party accounting firms in accordance with AICPA standards
- Can be converted into other cryptocurrencies available on the PayPal platform
- Can be transferred to PayPal or external accounts
- Venmo, a social payment service owned by PayPal, will also adopt the new stablecoin
USDC:
- Developed by Circle
- Built on the Ethereum blockchain
- Fully backed by U.S. dollar reserves
- Smart contracts allow for the freezing and seizing of tokens
- Undergoes regular audits by independent accounting firm Grant Thornton, LLP, to verify full backing of USDC tokens
- Can be converted into other cryptocurrencies available on the Circle platform
- Can be transferred to Circle or external accounts
- Currently has a market capitalization of $26.47 billion." |
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Post time 17-10-2023 11:11:44
