Ethereum could become internet’s money layer as PayPal issues PYUSD stablecoin as an ERC-20 token

Ethereum (ETH) price is suffering in the wake of Bitcoin’s falling dominance, recording lower highs and lower lows as overhead pressure continues to abound. Nevertheless, this gloomy outlook has not prevented the Ethereum blockchain from contending as a potential money layer for the internet.

Also Read: Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Low BTC dominance leaves investors wary of touching altcoins

Ethereum blockchain to support PayPal’s PYUSD stablecoin

Ethereum could become the money layer of the internet, a position that comes as payments giant PayPal makes a foray into the cryptocurrency realm. As reported, PayPal has launched a stablecoin, which means it will henceforth track the price of a fiat currency.

PayPal’s PYUSD  is not only pegged to the dollar, but also backed by short-term treasuries, dollar deposits, and cash equivalents, and christened PayPal USD with the PYUSD ticker. For the layperson, pegged means it is backed by cash equivalents, but then there is the added bonus of short-term treasuries backing.

PayPal CEO Dan Schulman in a statement to Bloomberg, talked about the PYUSD, which is Paxos Trust Company-issued, saying that the stablecoin is poised to become “a part of the overall payments infrastructure.”

Noteworthy, the PYUSD stablecoin will run on the Ethereum blockchain as an ERC-20 token, working in jointly with the rest of the payment giant’s cryptocurrency offerings, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). This means that users will be able to swap the dollar-denominated tokens for cash or other crypto assets on its platform.

Cryptocurrency offerings on PayPal

Ethereum as a possible money layer

Ethereum could become the internet’s money layer as PayPal, a reputed payments giant, leverages the blockchain protocol’s “speed, cost and programmability.” Being an ERC-20 token means PYUSD is a fungible token, meaning it is interchangeable with different tokens. More specifically, the announcement notes:

The stablecoin will be accessible to an already large and growing community of external developers, wallets and web3 applications, can be easily adopted by exchanges, and will be deployed to power experiences within the PayPal ecosystem.

With PYUSD structured to curb friction for in-experience payments in virtual spaces, the fact that it runs on the Ethereum blockchain facilitates expedited transactions and enables seamless developer-to-creator flow, while promoting digital asset growth.

Further supporting the money layer thesis is that PayPal facilitates approximately 70% of the transactions on eBay, and with Ethereum now playing in, the integration could increase the transaction volume on the American e-commerce company as customers and vendors now have more options to execute their transactions.

Citing the industry sleuth and digital asset consultant in a Crypto X post:

$51.8 billion (70% of $74b) could flow through PayPal Stablecoins from eBay alone.

eBay is poised to benefit from the 426 million active accounts on PayPal’s registry, with almost $1.2 trillion in volume across 19 billion annual transactions.

eBay PayPal annual transactions

With the year-on-year percentage change slumping, the integration of stablecoins could serve as a catalyst to steer further growth. With these statistics, experts say the move could serve as a catalyst for retail investor interest in blockchain-related technology, with a potential for digital assets being traded on established traditional marketplaces.