- PayPal’s recently unveiled PYUSD stablecoin has raised concerns about its centralization.
- The crypto community has pointed out that PayPal will be able to freeze its users’ funds.
- Some have argued that despite its flaws, the new stablecoin will be beneficial for the crypto industry.
PayPal’s recently unveiled PYUSD stablecoin has raised concerns regarding centralization from the crypto community. Several people have taken to X (formerly Twitter) to highlight controversial elements like PayPal’s ability to pause any stablecoin transfers and freeze its users’ addresses.
Crypto influencer Altcoin Daily posted a video on YouTube earlier today to highlight the concerning elements of the dollar-pegged PYUSD stablecoin. The flaws highlighted by the influencer reignited the historical debate about the degree of centralization among crypto assets, which takes away the decentralized essence that was originally intended for these products.
Crypto experts who studied PYUSD’s underlying smart contract found that the new stablecoin was actually written in an “extremely old” version of Solidity. Solidity is a programming language most notably used by the world’s second-largest blockchain, Ethereum. PYUSD is reportedly written in version 0.4.24 to be precise, which is expensive for the end user and doesn’t comply with current industry practices.
Other centralization concerns include PayPal’s ability to pause all transfers, freeze addresses, and funds, and even increase the stablecoin’s total supply at will. Users on X pointed out that PayPal could use this power to enforce unjust social standards, similar to when it threatened a $2500 fine for users who allegedly posted misinformation online.
Despite the concerns surrounding centralization, some crypto experts believe that PayPal’s PYUSD would be a net positive for the crypto industry. Popular crypto influencer Erik Voorhees argued that the above-mentioned concerns were true for existing stablecoins like Tether USD (USDT) and USD Coin (USDC).
Many in the crypto community have welcomed PYUSD, arguing that its affiliation with PayPal would pave the way for crypto adoption, given that PayPal caters to a whopping 430 million users around the world. Others added that PYUSD could onboard newcomers to crypto, eventually leading them to the DeFi space.
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