Can PayPal’s PYUSD Be Frozen In Your Wallet Like Tether’s USDT?
09 August 2023 - 8:00AM
NEWSBTC
PayPal and Paxos dominated the news cycle on Monday with the
announcement of the launch of the PayPal (PYUSD) stablecoin, but
concerns have been raised about the possibility of user assets
being frozen in their wallets, as is the case with USDT. Crypto
Community Adverse to Paxos Wallet Freeze Feature The PYUSD
stablecoin issued by Paxos has a condition that is not too welcomed
by the crypto community, which has dulled the initial excitement
for the launch of the PayPal stablecoin. According to reports,
Paxos, a blockchain infrastructure firm that issued the PYUSD has
several centralization issues which give them a certain amount of
control over user’s wallets. Related Reading: Valkyrie
Unveils Double-Barreled Approach To Launch An Ethereum ETF
Alongside A Bitcoin ETF Information published on its GitHub account
reveals that Paxos can freeze or suspend users’ wallets and
transfer functions on PYUSD authorization in the case of a security
threat. The Paxos freeze feature is quite similar to Tether’s USDT
which is able to freeze/blacklist users’ addresses involved in
fraudulent activities. Additionally, Paxos can withhold users’
funds and assets, as well as wipe the account clean if the law
requires it. The reactions from the crypto community were
instant and not too favorable as investors’ anxiety spiked at the
thought of possibly losing their substantial digital assets or
having their wallets on lock. Centralization has always been
a touchy subject for the crypto community as decentralized networks
are often believed to be more secure and distribute control among
network participants rather than a central body. Paxos has
stated that freezing accounts is unlikely to happen often, and the
company itself would not execute the process. Stock price
holds above $62 following stablecoin launch | Source: PayPal
Holdings, Inc. on Tradingview.com PayPal Launches PYUSD Stablecoin
Global payment giant PayPal recently unveiled its latest
innovation, the PayPal USD (PYUSD) stablecoin, on August 7, in
collaboration with Paxos, a New-York based blockchain
infrastructure company. The news comes as a significant development
for the Paxos ecosystem, as the integration of cryptocurrencies
into the financial industry continues to grow. The crypto
community has largely welcomed this new development, as investors
and traders are gearing up to take advantage of the token and its
conveniences. Analysts also predict that popular cryptocurrencies
like Bitcoin and Ethereum prices will also benefit significantly
from the new stablecoin. The PYUSD is an ERC-20 token
developed on the Ethereum blockchain backed by the US dollar.
Launching PayPal’s stablecoin is expected to help make crypto
trading and offerings easily accessible on the payment
platform. Related Reading: PayPal’s PYUSD Launch Triggers
Calls For Stablecoin Bill With PayPal’s user base reaching 400
million in 2022, the PYUSD stablecoin launch will also help
facilitate crypto adoption and awareness, exposing a significant
portion of the global population to digital currencies.
President and CEO of PayPal, Dan Schulman, commented, “The shift
toward digital currencies requires a stable instrument that is both
digitally native and easily connected to fiat currency like the
U.S. dollar. Our commitment to responsible innovation and
compliance, and our track record delivering new experiences to our
customers, provides the foundation necessary to contribute to the
growth of digital payments through PayPal USD.” Featured image from
HowStuffWorks, chart from Tradingview.com
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