JPMorgan thinks that the stablecoin that PayPal will issue can increase Ethereum activity.
It has resonated in the industry that PayPal will issue stablecoins for Blockchain payments. However, JPMorgan thinks this move could increase activity on Ethereum.
PayPal stablecoin comment from JP Morgan analysts
According to JPMorgan analysts, it is stated that PayPal’s stablecoin launched this week could benefit Ethereum. This could increase Ethereum’s effectiveness and improve the network’s ability to serve as a stablecoin and DeFi platform. This may encourage more firms and projects to opt for Ethereum in the future.
JPMorgan analyst Nikolaos Panigirtzoglou states that Ethereum can benefit more than PYUSD. Specifically, it is thought that PYUSD could fill a gap that emerged after Binance’s BUSD stablecoin was shut down by regulators. If PYUSD can fill this gap, the DeFi ecosystem could turn to Ethereum.
However, some crypto experts criticize PayPal, considering Ethereum’s high transaction fees. In particular, it is stated that Layer-1 Blockchain networks such as Sei Network, which aims to offer low transaction fees, may be a more suitable choice. This may affect the user experience and PayPal may need to find alternative solutions to provide lower transaction fees for its stablecoin.
JPMorgan analysts Mayur Yeole and Nikolaos Panigirtzoglou say PayPal’s entry into the stablecoin business could create synergies in payment networks in traditional and decentralized finance. However, it is noted that the regulatory framework is still unclear and the compliance/regulatory frameworks of fintech companies may change in the future.
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