CCN reached out to PayPal for commentary but did not receive a reply at the time of publishing
In the meantime, a Twitter account raised a red flag regarding a major flaw in PayPal’s new token.
Stablecoins are at the core of many deliberations between crypto stakeholders in the US.
For starters, Binance, the world’s biggest crypto exchange, has recently expressed doubt regarding Tether’s USDT, calling it a “black box.”
“I personally have not seen any audit reports of USDT. I don’t think most people I spoke to have not seen that either. So it’s kind of a black box because we just don’t know,” said CZ, Binance founder.
Second, reports are showing a significant drop in stablecoin trading activity. The stablecoin market cap decreased by 0.82% from the beginning of the month until July 17, according to a study published on July 20 by CCData, bringing the sector’s market size to $127 billion.
Third, during a Capitol hearing, Federal Reserve Chair Jerome Powell stated that “We do see payments stablecoins as a form of money,” adding that “the ultimate source of credibility in money is the central bank.”
However, the SEC, led by Chairman Gary Gensler, has a different view. The SEC currently tries to shut down any cryptocurrency that is not Bitcoin, Bitcoin Cash, Litecoin, or Ethereum, claiming any alternatives should be considered ‘securities’.
Finally, Paxos, the company responsible for issuing PayPal’s stablecoin, is currently in the middle of a lawsuit filed by the SEC for allegedly failing to register with the agency.
An interesting find on Twitter shocked users by claiming that “PayPal stablecoin gives the company the ability to freeze and wipe your assets.”
The Twitter account made the deduction after checking comments left within the coin’s coding with statements such as “@dev wipes the balance of a frozen address, and burns the tokens”