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The bitcoin price has rocketed to around $30,000 per bitcoin this year, doubling from its late 2022 lows, and helping other top ten cryptocurrencies ethereum, BNB
Now, after payments giant PayPal
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Crypto has been primed for a stablecoin boom after PayPal announced its new cryptocurrency that … [+]
“We expect major global financial and consumer platforms to issue co-branded stablecoins to power value exchange on their platforms,” Bernstein’s Gautam Chhugani wrote in a note seen by CNBC this week. “Going forward, we expect tokenized stablecoins to be a $2.8 trillion market, led by regulated, onshore stablecoins.”
Stablecoins—cryptocurrencies that are price “pegged” to a traditional currencies or assets, typically the U.S. dollar—will become a “growth flywheel,” according to Gautam, creating “the monster crypto killer-app” and “hyper-fast financial settlement layer.”
“We expect these revenues to be shared with their consumer partners, making co-branded stablecoins attractive for new platforms,” Chhugani wrote. “We expect this profit pool to become increasingly on-shore, regulated and shared between consumer distribution partners.”
Gautam pointed to Singapore, Hong Kong and Japan all leaning into stablecoins, with the technology finding “more political support than crypto regulation” more broadly.
The stablecoin market is currently dominated by Tether’s USDT
Some have argued Tether’s USDT was behind bitcoin’s huge 2017 price rally, suggesting a potential link between the size of the stablecoin market and bitcoin price.
PayPal’s PYUSD, built on the ethereum blockchain, is the first stablecoin to be launched by a fully-regulated major financial company in the U.S., with the announcement sparking expectations other financial and Wall Street giants could follow suit.
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The bitcoin price has swung wildly over the last few years, along with the price of ethereum, BNB, … [+]
“The PayPal stablecoin launch is a testament to the fact that both crypto and the TradFi ecosystem can indeed co-exist efficiently,” Alex Vasiliev, Co-Founder and CCO at the global payments platform Mercuryo, said in emailed comments, calling its launch “a watershed moment.”
“The evolution of the crypto industry is gradual but certain and while PayPal might be extending its pioneering move as a big backer of digital currency innovations, I am certain that more mainstream fintech companies will also follow the firm in the long term.”
“Companies like PayPal can offer cheap, effective ways to bridge the two worlds, and I’m thrilled by the prospect of them doing so. Their offering a stablecoin on Ethereum is also a huge vote of confidence for the ecosystem and a signal that traditional players will increasingly be moving into the space,” Andy Bromberg, cofounder of crypto exchange CoinList and chief executive of the a16z-backed crypto company Eco, said via email.