The crypto market is booming, and it’s not hard to see why when even the president of the United States tweets about the subject on Sunday morning.
While that’s currently the bullish force pushing us forward to start the week — after a less than stellar time last week — it’s hard to say whether the positive momentum is enough to last.
It’s good to know that the legitimacy of the space doesn’t need to be based on postings from world leaders.
PayPal is a good example.
“I think that the ultimate goal is that whatever you see a way to move money around, on the PayPal side, you should have an option to do that with digital currencies,” PayPal’s Jose Fernandez da Ponte told me.
This is his prediction for the convergence of crypto with traditional payment methods. Stablecoins clearly are the future. “killer application of blockchains for payments” He said that right now. According to rwa.xyz, the sector’s market capitalization is $220 billion.
PYUSD, PayPal’s stablecoin offering, has a market cap of roughly $760 million which puts it in the top 10 stablecoins, but it’s nowhere near Circle and Tether — the two whales in the space.
Market share may not be the primary concern for da Ponte, but it is still important.
“I think that the obsession with market cap is because that’s an artifact of how stable coins get monetized. Today, a lot of the large issuers basically make money out of the deal done on the reserves. We think that over time, that’s going to be less relevant, that monetization will move away from interest rates and more toward transaction fees, and that stablecoins are going to be monetized by consumer flows,” He clarified.
Da Ponte added that this doesn’t necessarily mean they do not want the PYUSD currency to increase. “we want to be bigger than we are today.” Instead of obsessing over the market capital, da Ponte’s team is focused on the chain transfer volume.
Da Ponte is of the opinion that we are going to be seeing more and more what he refers to as a “stablecoin sandwich,” What is “fiat on one side, and then the stablecoin as a sort of settlement layer and then you see fiat on the other side.”
“We have seen that in our own remittance flows. So when we are settling with partners in the Philippines and other markets in stablecoins these days, the consumer sees fiat, the sender sees fiat, the receiver sees fiat, and we are capturing the advantages of stablecoins on the infrastructure side.”
PayPal is a payments giant, so it has to demonstrate that they are focused both on digital and fiat currency, and allow their customers to choose between the two when using the platform.
Disclosure: I asked PayPal if they would be interested in a stablecoin that paid a return if certain conditions were met. Da Ponte, who was very polite about the situation, told me it is okay. “difficult to talk about hypotheticals,” But they’ve not really thought about it. That doesn’t mean it’s totally off or on the table — just not on the radar of the payments giant at this time.
PayPal’s goal, as da Ponte put it, is to seamlessly integrate crypto and traditional payments. More than that, it’s important to make crypto payments easy and seamless for both non-crypto people and native crypto users.
This is the type of adoption that we need.
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