Payments giant PayPal launched a stablecoin earlier today and it doesn’t impact USDT in any way, said Tether CTO Paolo Ardoino.
"We don't expect any impact on USDT," Ardoino told The Block. That's because PayPal stablecoin (PYUSD) has been launched in the U.S., where Tether does not serve, said Ardoino. But when asked if PYSDC launches in international markets, Ardoino said it would be positive for the crypto industry in general.
"It's interesting. Another stablecoin in the U.S. It could lead to the erosion of revenues for payments that have been mainly fueling Mastercard and Visa. It will also help the industry to grow further and push for sensible regulations," he added.
Another way the PYUSD launch could help Tether is that it could impact Tether's competition. "It might mean an additional decline of our competition that is very much focused on the U.S.," he said, possibly hinting at rival Circle's USDC stablecoin. "Tether instead focuses on emerging markets and developing countries."
PayPal's stablecoin and its impact on USDC
The immediate impact on USDC, however, is unclear, according to David Wells, CEO of Enclave Markets, who was previously the product lead for Paxos dollar (USDP) and Binance USD (BUSD) while working for Paxos from 2017 to 2020.
Wells told The Block that PYUSD, which is issued by Paxos, and USDC will likely compete for similar customer segments who prefer to use a U.S.-based regulated stablecoin as opposed to the offshore stablecoin segment, but for PYUSD to fully compete with USDC, the former's listing on crypto exchanges will be needed.
"It's unclear when/if PYUSD will be listed on large exchanges, so it may be focused on the cross-platform payments use case to start," Wells said. "Longer-term PYUSD will likely compete with USDC in crypto trading market share as well, potentially in DeFi [decentralized finance] marketplaces."
Anders Helseth, vice president at crypto research firm K33, echoed Wells. “I think an important factor in the short term is whether any exchanges adopt the PayPal stablecoin,” Helseth told The Block.
Circle did not immediately respond to The Block's request for comment.
Tether's USDT is the first and largest stablecoin in the world, with a total supply of over 84 billion tokens, according to The Block's Data Dashboard. USDC follows USDT with a total supply of over 24 billion tokens.
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