If it was actually "backed by deposits" then you wouldn't need it. You would simply transfer those "deposits" around.
So what they're actually doing is bypassing banking legislation and attempting to do fractional reserve banking with no licence. They're also trying to bypass official currency and counterfeit their own shit. People need to start doing time for this because it is ridiculous that these clowns think they can just skip past a thousand years of legislation. Minting your own coins? People used to get beheaded for this.
The currency is regulated by NYDFS which has specific regulations for how stablecoins must be backed. TL;DR: 1:1 backing by T-bills and deposit accounts at regulated banks. There is certainly fractional reserve banking going on within those depository banks, but not specifically by PayPal. https://www.dfs.ny.gov/industry_guidance/industry_letters/il...
> Who else read PYUSD as "pie-usd" intuiting something like "Python USD"... "pip install pyusd"
Honestly? Probably no one, but I like here your head is going; money as code is something that we in the Bitcoin community have been advocating since it's inception. People need to understand that money has to evolve, and that the current system is as archaic as the massive computing machines that occupied entire warehouses in comparison to where we are in terms of computing power and advancement.
If seen from a purely technological lens: fiat is a Luddite's folly.
Personally, I think that the stablecoin behind Paypal must be seen in the same lens as Zuckbucks (Libra) but it is shifting the POV that the majority 85% of the population that you can in fact have systems which not only allows for 24/7 transactions (I doubt Thiel-bucks will be seamless given my experience with Paypal mafia) but they also allow for Bitcoin to enter as the leader of the paradigm shift.
Honestly, if Thiel has done it as this point--an entrenched fossil in terms of fintech--you HN stragglers need to realize that this is where money is going, whether you like it or not at this point.
Web 3.0 and NFT BS always were VC's COVID rug pull, cash grab with cheap money; however, that doesn't mean the underlying tech we've built isn't sound and slowly taking over the financial system (the way some of us in this for 10+ years always wanted it) as Blackrock, who has more assets under management than God, is getting close to it's Bitcoin ETF and the SEC saying anything but Bitcoin is a security etc...
With that said, I honestly envision a World with competing non-nation State fiat currencies is now inevitable; Global inflation is now at unpayable levels and will continue to de-value as the Geo-political and environmental situation intensifies, despite our best attempts.
What becomes of this is where the real experimental design runs at it's simulation limits, so it will be interesting to see what happens from here.
> If seen from a purely technological lens: fiat is a Luddite's folly.
Tech people always write off the Luddites, even after the point at which they start to sound like them.
It bears repeating that the Luddites were not indiscriminate wreckers or fools, and their ideas not “folly”. They were not trying to keep people stuck in the dark ages: they were trying to protect highly-skilled jobs.
The same is true of the Amish and Mennonites: there is not just the one accommodation to reach with technology. Other accommodations are possible and may be healthier.
And beside some slogans, how exactly will cryptocurrency beat that "archaic" system? As a customer there is exactly 0 benefit for be to use crypto. The single mobile app from my bank, allows me to pay for anything online in few seconds, contact-less credit cards do the same in brick&mortar shops. I am literally afraid that physical cash will die out, cause it isn't convenient enough.
There’s a wide range of products and services that are native to crypto that you don’t have access too without a blockchain wallet. Now you personally might not care about nfts, tokens, exclusive clubs, blockchain games just to list a few, but other people definitely do.
Also the parent comment is out to lunch, crypto will likely never replace fiat simply because there’s nothing preventing states from implementing the parts of crypto that succeed.
> Now you personally might not care about nfts, tokens, exclusive clubs, blockchain games just to list a few, but other people definitely do.
Sure, but those are niche things that most people will never care about. Awesome for the people who are into such things, but not a draw for everyone else.
> As a customer of USD, there's attrition of purchasing power.
There is no denying that USD has sticking power, despite it's immense loss in purchase value since it's inception, but relative to all other currencies I guess it has won the attrition battle; though if I'm honest if that were the sole reason you should have been in GBP to remain consistent in your logic.
Honestly, this is the best of bad options, but I guess the perspective if taken to it's logical conclusion is that: ultimately might makes right.
The Petro-dollar Empire is backed by 'proof of violence' is a commonly held belief amongst (early) Bitcoiners, but because it can be obfuscated by many layers of abstraction the general public is often none-the-wiser: but is none the less true.
I'm no longer the idealist I was in my teens or 20s as a (former) environmental-activist and felt people can be swayed by reason and logic alone; I've come to know most will never accept anything that isn't deemed in there own best personal interest, but just look around what we are dealing with in terms of potential nuclear war/contamination or environmental and climate cotastrophe; that is mainly attributed to the 'must grow at all costs' economic model that sustains the fiat system and makes nation-states war for influence of nations and there resources via unpayable loans and debt bondage.
We cannot live like this for very long, so what good is a Roth IRA with fat margins if the end result is shorter life expectancy, diminishing quality of Life and the growing issue where you cannot access more things of value in those ever inflated units of currency as supply chains collapse under the strain of the aforementioned?
I think this above all else is what needs to be understood, and if we really want to live in such a World anymore?
Thoughtful response. I'm not onboard with man made climate change but in turn, I also agree with your "must grow at all costs" being the wrong direction for humanity. I've never felt like anyone is willing to have a calm discussion in the climate arena and I appreciate and respect you. So maybe it is possible to sway opinions of stubborn asses like me given the right attitude :)
> I've never felt like anyone is willing to have a calm discussion in the climate arena and I appreciate and respect you.
Well, thank you for the kind words, but it is a very emotive topic for some of us as we lived through the consequences of inaction: especially for some of us that have gone through the myriad of phases of despair--despite supposed forms of success--and our emotional baggage comes with us.
I wish I could tell you in a dispassionate stoic demeanor what has gotten us to this point, but I grew up with mass fire season in SoCal coupled with endless droughts and it made me acutely aware from a very young age how catastrophic just small degrees in changes to an unsustainable system can be. It's made me incredibly sensitive to broken systems as a result--in 2018 I worked at IBM and told a few C-level execs wanting to use Blockchain that wha tthey really should be focused on is that the JIT supply was unsustainable and would end badly when even a small amount of stress was applied to it, whether it be the rising rising geopolitical instability, or climate change etc... to deaf ears. The COVID Happened and proved me right, but I didn't feel righteous, I felt despair that foresight isn't used and at scale can create mass panic.
I was dismayed despite this being what I thought was a critical position to be embraced rather than fall haphazardly headlong into the abyss of unknowns because it was deemed to be in order with chasing the endless gains from ruthless 'efficiency at all costs' in order to prop up this system.
What has unfolded since COVID was entirely predictable for some of us, and for those who sounded the alarm were shown the door as we were seen as pariahs.
But, honestly I agree that there are a myriad of causes that exceed man-made cause for climate change (evidence that shifts in sun patterns/activity that create less cosmic rays and lessen cloud cover for example), but the fact remains that these things are happening and we have to live with it. I honestly feel this is like the provurbial re-arranging deck chairs on the Titanic.
Again, I could coax myself to make the arguments in a dispassionate and Stoic manner possible in the hopes that something is done, but as we have seen these last Summers we are beyond the point where we can prevent this: we have to build systems that are resilient to these problems. Hence, my loss of idealism to pragmatism and practical applications.
Carbon sequestration is what interests me most, particularity using the largest advent of Human ingenuity and thus largest source of economic generation in the Global economy (so large it cannot be accurately quantified): Agriculture/Food. And the fact that we have the tech to incentivize a positive impact via monetary systems: now Bitcoin is going to landfills and capturing the methane (much more potent GHG) to run miners and offsetting expenses for local municipalities and helping to secure the Bitcoin network in the process.
This is how we should be framing how to build resilient and perhaps anti-fragile systems; instead of succumbing to the endless patchwork of processes that make us more vulnerable as they do not accept the realities for what they are, which we are marred by in the West--we fall victim to fanciful stories about inconceivable and entirely false things like China and Russia being swayed by Capitalism and not just using those resources like they have for millennia as authoritarian despots who wreak havoc when they have an advantage or the chance to assert themselves. It's like we are drunk on our own failures and simply refuse to sober up to see the mess we've made--it's terrifying to realize that no one in a position to do anything about it really knows what the f' they are doing!
Ultimately the reason(s) is because I realized that Human conduct can be most easily understood by the incentives placed in front of them towards a desirable end. And the fact that I've been doing it almost my entire professional career to some degree, whether it was in the Automotive Industry, Farming, Tech, or Cooking.
Your words make me realize how damaging the left / right paradigm are to our progress. There are so many things that people agree on from both sides and perhaps the work never gets done because people focus on the differences more these days.
My personal side business niche is in transportation (DIY eBike) and solar. I've made a few bikes that are cool enough to get the "motorcycle wave" from the local moto-bikers.
I've also found oversizing the battery makes it so I only throw away on average x5 18650s cells per year for 50% of my transportation needs.
In 2020 we started an electric lawn care business that used a single (1/16) 25.2V tesla model S battery as the "big tank" in a bicycle trailer and it propelled the rig and charged the 40/60V implement batteries via boost converter.
My incentives back in 2007 were high gas prices and a disdain for relying on those in control of energy. Being able to teach others about the tech is a big source of satisfaction for me. Surprisingly most of my customers for these products I would guess were right/libertarian leaning.
I feel sometime like the loudest voices (on both sides) help turn people off from considering opposing thoughts and here we are twiddling our thumbs. Thanks again for chatting with me.
> And beside some slogans, how exactly will cryptocurrency beat that "archaic" system
You should really try to see it from anything other than a consumer to get it, which most of you are not and never will be; inflation and fees are killing small businesses, which is why you're seeing more and more consolidation of market share. COVID exacerbated an already growing issue with diminishing market share in many Industries. Effectively by using these merchants who offer short term convenience you are slowly ensuring a monopoly will take place.
Hence the grow at all costs VC mantra; they're greedy but not stupid because they know most consumers are the most part uninformed in the value chain and will gravitate toward the path of least resistance even when the end outcome is that they're worse off than when they started. You're to be harvested in every sense of the word.
Consider that, if we are to focus on developed Western nations like the US, small businesses employ a majority of people so appealing to them with lower to no cost fees, with instant transactions and settlement, and include built-in accounting and auditing (no need for complex tax lawyers/accountants) this could be the nail in the coffin if you're really asking that question. Much needed regulation is always no where to be found in the traditional monetary system because financial institutions whether they be large mega banks or corps operate in an opaque, shadowy realm where they can have 0% tax liability yet record ever growing profits.
The real question is have we reached a breaking point of this by now? I'm not convinced this will be a matter decided at the nation-state level, it is in there interest to keep business as usual; it will be when enough people decide to opt-out of this system of perpetual exploitation and theft.
I also want to go on a rant about a topic about BS jobs qt the crux of my argument, but for clarity's sake I will remain on topic but I'll let your imagination run with how that would go.
The only real question left to answer is whether enough of the general public (of any nation) will ever be receptive to seeing Bitcoin in this light rather than the current mantra that it's a scam and to this end we need to improve. In the under developed nations, or where hyper inflation/currency collapse or even capital controls are common this has already taken place.
Moreover, the cost of maintaining these immense monoliths like Visa or Mastercard, are not only costly in a financial sense, but are prone to continuous hacks and breaches: which if you take as anything but an externality becomes the real sink on time and energy than anything like mining ever could,
Honestly, this is an optics issue because the tech is there; improvements are needed but LN has been making huge strides since the drop in the latest bubble (when the real work is done when no one is looking) and things like splicing are finally offering the privacy component that should have been built-in at the base layer.
Cash has a purpose, primarily that of privacy and fungability, but I think I'm speaking about something that like most who promote the use of spyware for a living that FOSS is the only way to operate in the 21st Century because of the inherit threeat to to one's privacy: the point is likely to be lost.
As for NFTs and such... while I dislike the term waste of time when we are still in the experimental phase, it has certainly detracted from overall progress more and more over time; because the narrative changes from an actual financial system to one of a hyper accelerated boom and bust cycle, and sadly the most hyped parts are often the biggest waste of resources--we've been here before with ICO and Crypto Kities.
In conclusion, I had to buy something on Saturday evening when banks were closed: the price warranted the extra effort and in the end I had to use 3 work arounds, using BTC no less, because the current fiat financial system didn't work. II had the funds, I just couldn't use them for this purpose.
It was a 4 figure purchase and getting that amount of cash or having a private party accept such a sum came with ever more complications the further I deviated from BTC and no staff from any of the typical merchants were there to make it happen.
It’s programmable, meaning you can use it for smart contracts. A common smart contract use case is dex smart contracts that let you swap between other cryptos and usd without any counterparty risk.
PayPal is a closed ecosystem that doesn’t support smart contracts or any other form of arbitrary code execution. If your point is that traditional finance uses code, sure, but that disguises the real differences between those systems and web3.
USDT and USDC would be the two biggest examples by market cap, though USDT has been mired in... "controversies", and USDC almost got hit by the US Banking Panic this year,
USDC definitely got hit as it depegged from the USDC for few days and traded for $0.87 at some point, it didn't "explode" (and it restored its peg) only because the US government promised to bail out customers of the Silicon Valley Bank fully and not just upto $250,000 as it would be the case if in an usual FDIC coverage situation. Circle, the company behind this stablecoin had about $3.3 billions in SVB.
That goes for all currencies though. After the Brexit and the possible Grexit, a possible Euro collapse had me worried.
Note that I'm not defending Tether. I have no use for it, I'm just pointing out a bigger picture. The solution is to spread savings across different asset types.
Really "stable coins" are what I would call an attractive nuisance for theft as they call for money sitting around doing nothing "for later" makes a very tempting target. The cryptocurrency space is absolutely loaded with such things. See the number of "banks" and exchanges which suffered from a case of "take the money and run".
This seems like yet another ERC-20 stablecoin with no special "quirks", from a quick reading. My question is, what is the reason for this to exist over existing stablecoins that have much broader acceptance and long history (for crypto anyway), e.g. USDC/USDT?
Oh, they exist so they can throw their peg and crash losing 99 percent of their value while the company or individuals responsible tell their users not to worry and that it is totally under control.
for a company like this, the real reason is because you can give users 0% return while on the backend actually making return with their money, same as any "bank" that holds usd.
for people like do kwon and sbf, and many others I probably don't know about, what you said
Banks are competing for deposits; this rate pressure is already hitting earnings. And they take maturity-transformation risk. PayPal has found ersatz depositors without depositor protections who will accept zero yield in a high-yield environment. They could literally just roll into Treasury bills and overnight funding and ink a decent profit.
Kind of depends on PayPal’s implementation details, but it’s still quite painful to transfer assets between web3 and the traditional financial system. If it’s easy to transfer pyusd from PayPal to a private ethereum wallet and vice versa, it could potentially be an easier way to move usd in and out of crypto.
Of course this probably won’t happen for regulatory reasons, and even if it does pyusd may have the same type of blacklisting that prevents many dapps from using usdc.
Utility. PayPal claims they will allow payments to be done in this if the user wants to. Let's say someone holds 20 PYUSD and he reaches the checkout page of an item costing $10. He should be able to use 10 PYUSD to buy that item. PayPal will also allow free conversion between PYUSD and PayPal balance. So crypto folks finally have something that can actually be used IRL.
Easy on and off ramp to paypal? Thus existing solely for benefit of paypal.
Paypal getting their cut from crypto market and spenders there... Maybe some crypto-users thinking that them trading for these coins and then using them to buy stuff is finally real world adoption...
you do not, it is useful for contracts between payments companies, and directly increases the assets of PayPal Corp. Basically you are a pebble on the beach, and these people want to create new kinds of automatable sand-movers.
If paypal can make these "gold coins" look like real coins then they can freely mint their own coins and trade them for real assets. When people cut them open and find that they are made of lead then it will be too late, the owners will be long gone.
It also lets them take real money off you and give you casino chips that you can send around. The chips are meaningless so they never actually have to give your real money back as long as they stay in the casino. If you do ask for them back, they've been collecting interest on them the whole time so they'll double up either way.
> When people cut them open and find that they are made of lead then it will be too late, the owners will be long gone.
This isn't true. This is regulated. PayPal will be required to back this 1-1 with cash and treasury bonds. Unless you're saying that PayPal will commit fraud.
> If you do ask for them back, they've been collecting interest on them the whole time so they'll double up either way.
Yes stablecoins are in my opinion one of the most lucrative ideas right now. They can make billions just from treasury yields if they capture a large share of the market.
Hopefully this will allow you to offboard crypto easier.
A lot of banks don't want to take incoming transfers if they see that they are from a crypto affiliated entity/bank, now you can (hopefully) have exchange wallet on binance/etc you want to cash otu -> Buy PaypalUsd on exchange -> Send PaypalUSD to PayPal account -> Swap stable for cash -> Send it out from Paypal account to normal account or keep it there. Again thats assuming Paypal plays ball with these exchanges.
So I guess any fee will basically be you paying Paypal to launder "crypto exposure" for you when moving back to fiat. The biggest way to make money in crypto right now is to figure out an offramp with capacity. There is a lot of people who have way too much crypto and want to offramp into fiat but can't.
So what they're actually doing is bypassing banking legislation and attempting to do fractional reserve banking with no licence. They're also trying to bypass official currency and counterfeit their own shit. People need to start doing time for this because it is ridiculous that these clowns think they can just skip past a thousand years of legislation. Minting your own coins? People used to get beheaded for this.