
Bank of America has provided its investigation of Paypal’s U.S. dollar stablecoin and the Fednow payments system. The slope does not expect the wide adoption of PYUSD to hap successful the adjacent future, noting that the instauration of Paypal’s stablecoin volition not pb to “accelerated regulatory clarity.” Nonetheless, Bank of America believes that stablecoins person the imaginable to supply a much businesslike outgo solution.
Bank of America connected Paypal’s US Dollar Stablecoin
Bank of America published a Global Digital Asset Strategy study past week covering its presumption connected Paypal’s U.S. dollar stablecoin and the Fednow payments system. The study was written by Alkesh Shah, caput of planetary crypto and integer assets strategy astatine Bank of America Global Research, and Andrew Moss, the bank’s planetary integer plus strategist.
Paypal (Nasdaq: PYPL) is launching a U.S. dollar-denominated stablecoin, called Paypal USD (PYUSD), which volition beryllium disposable to U.S.-based Paypal customers. According to the payments giant, the stablecoin volition beryllium compatible with prime third-party integer plus wallets and backed by accepted assets, including the U.S. dollar, short-term Treasuries, and currency equivalents.
Noting that Paypal, with 435 cardinal users, is the archetypal planetary institution “to motorboat a stablecoin with regulatory approval,” Bank of America stated:
We expect PYPL’s PYUSD motorboat to thrust payments efficiencies and an improved lawsuit acquisition implicit time, but PYUSD adoption is improbable to beryllium important successful the adjacent term, fixed deficiency of wallet compatibility, speech trading pairs oregon caller functionality.
“Over the longer term, we expect PYUSD to acquisition further adoption headwinds arsenic contention from CBDCs [central slope integer currencies] and yield-bearing stablecoins increases,” Bank of America continued. “Investors whitethorn person been good holding non-yield-bearing stablecoins, specified arsenic USDT and USDC, erstwhile rates were adjacent to zero, but yield-bearing stablecoins volition apt go progressively disposable and charismatic with short-term rates supra 5%.”
Regarding crypto regulations, Bank of America stressed:
We bash not expect PYUSD’s motorboat to pb to accelerated regulatory clarity, fixed the stablecoin’s issuance does not change systemic hazard for accepted markets, but the stablecoin whitethorn look regulatory headwinds if non-banks are yet barred from stablecoin issuance.
Bank of America connected Fednow
The Bank of America study besides provides an investigation of the Fednow service, which went live connected July 20 to “enable fiscal institutions, specifically banks and recognition unions, to facilitate slope account-to-bank relationship transfers of lawsuit funds successful (near) real-time,” the slope described. Shah and Moss detailed:
We presumption Fednow arsenic a needed and innovative solution to a occupation – inefficient home payments and transfers – that different countries person already solved.
The analysts explained that Fednow’s infrastructure does not leverage blockchain technology, stating: “Instead, Fednow uses accepted outgo rails to nutrient an interbank colony system.”
They emphasized: “As the integer plus ecosystem evolves, we spot the imaginable for stablecoins and, ultimately, CBDCs to supply an adjacent amended solution that would beryllium faster and cheaper, particularly for cross-border payments and transfers, which Fednow does not enactment … We enactment that the efficiencies Fednow enables are improbable to beryllium afloat captured without fiscal instauration adoption and resulting web effects, arsenic good arsenic improvement of end-user interfaces and applications.”
Do you hold with Bank of America connected Paypal’s USD stablecoin and the Fednow system? Let america cognize successful the comments conception below.