#stablecoin

Coinbase and Circle, five years after jointly launching USDC, are evolving their partnership. Coinbase is acquiring an equity stake in Circle, emphasizing their shared vision for the financial future. To further its reach, USDC will launch on six new blockchains between September and October, expanding its multi-chain presence to 15. With clearer global stablecoin regulations, Circle will assume all governance, including smart contract management. The Centre Consortium, initially governing USDC, will dissolve.

Singapore’s central bank, the Monetary Authority of Singapore (MAS), has released a final regulatory framework for single-currency stablecoins (SCS) under its regulation. MAS stated that the framework’s goal is to guarantee “a significant level of value stability” for stablecoins. This framework will be applicable to all stablecoins tied to the Singapore Dollar or any other G10 currency issued within Singapore.

Facing increased competition from conventional financial giants like PayPal Holdings Inc., Circle is taking strategic measures. To counter this threat and counterbalance the diminishing market share of its USD Coin stablecoin, Circle is expecting leveraging a substantial cash reserve surpassing $1 billion. The circulating supply of Circle’s USD Coin has experienced a decline, shrinking from $45 billion to around $26 billion since the start of this year.

Casting their gaze five years into the future, investment company Bernstein speculates the stablecoin market will burgeon to a staggering $2.8 trillion. A key catalyst for this boom? The widespread adoption of stablecoins by financial platforms, a trend set to amplify the circulation of these tokens.

Brian Armstrong has expressed his belief that Binance has transferred some of their USDC assets to a different stablecoin, according to anonymous sources in Cointelegraph. NotChaseColeman, an analyst, highlights that Binance and Justin Sun are strategically moving from USDT to USDC to secure USD, which will then be invested in FDUSD and TUSD (assets controlled by the company). Adam Cochran, a name we're familiar with, weighed in, drawing attention to the activities associated with Binance addresses. He observed: “Even with banks open in Asia and Europe and US coming online, USDT peg is off by the deepest sustained amount since the FTX fall out. Selling pressure once again coming in from the Binance.” Adam thinks the uncertainty surrounding USDT is at an all-time high, and the Curve Finance and Uniswap platforms are overrun with USDT. He was optimistic about a more promising USDT horizon today, but that seems to be deferred. BTC has touched the 28,710 threshold. Indeed, Mondays have their unique trials.

Under the new regulations, stablecoin transfers will require up to three business days. This rule has caused bewilderment within the blockchain community. However, officials state that this restriction is consistent with the pace of standard domestic money transfers and will also apply to stablecoin redemptions. "The redemption timeline is intended to strike a balance between responsiveness to users’ requests and ensuring there is enough time for the SCS issuer to do so in an orderly manner under various stress situations," added the regulator.

Despite advances in payment effectiveness and customer care, analysts Alkesh Shah and Andrew Moss from Bank of America think that PayPal USD (PYUSD) won't be widely adopted anytime soon. They wrote, "Over the longer term, we expect PYUSD to experience additional adoption headwinds as competition from central bank digital currencies (CBDCs) and yield-bearing stablecoins increases."

The recent debut of PayPal's stablecoin, PYUSD, has drawn concern from Congresswoman Maxine Waters. She criticized PayPal's entry into the cryptocurrency market without a defined federal regulatory structure. Highlighting PayPal's vast clientele, which outnumbers the combined accounts of major banks, Waters stressed the pivotal role of federal oversight in crypto dealings: "As I’ve said for more than a year, without legislation on the books that establishes clear and strong consumer protections at the Federal level, consumers are at greater risk of harm at the hands of bad actors."

Tether CTO: "The launch of PayPal stablecoin doesn’t impact Tether as the firm does not serve U.S. users. If PYUSD launches in international markets, it could have a positive impact on the crypto industry and potentially erode revenues for payment giants like MasterCard and Visa." Co-founder of zkLend: "PayPal will indeed bolster the perception and acceptance of cryptocurrencies, but it can lead to a diminished market share for decentralized stablecoins, threatening the very principles of decentralization that underpin the crypto space." Analysts at JPMorgan: "This could boost Ethereum activity and enhance Ethereum’s network utility as a stablecoin/DeFi platform. PYUSD could fill the void left by the $20 billion shrinkage of Binance's BUSD stablecoin, which was forced to shut down by U.S. regulators earlier this year." Co-founder of Sei Network: "The gas fees of using PYUSD will be ridiculous, which will disincentivize its usage. To help make the user experience better, PayPal will either need to subsidize transaction costs or will need to help support PYUSD on other networks with cheaper gas fees." It's worth noting that PayPal currently serves 435 million customers globally.

Partnering with Paxos Trust, financial giant PayPal has unveiled PayPal USD (PYUSD), focusing on swift and budget-friendly payments. With backing from dollar deposits, short-term government securities, and similar cash equivalents, PayPal's CEO, Dan Schulman, envisions the stablecoin bolstering the company's foothold in the digital currency space: "The vision over time is that this becomes a part of the overall payments infrastructure."