Last month, Paxos announced it adopted Chainlink’s PayPal USD (PYUSD) price feed, allowing users to view highly accurate, reliable and decentralized market data for PYUSD on the blockchain. The launch garnered wide interest, and recently Nick Robnett, Paxos’ Senior Director of Stablecoin Partnerships, spoke with William Reilly, Chainlink Labs’ Head of CeFi, in a live discussion. The dialogue focused on the benefits of PayPal USD (PYUSD), the deployment of Chainlink’s Price Feed for PYUSD and the impact stablecoins will have on the future of finance. 

Check out the highlights from the interview below.

Stablecoins are the future of money movement

When asked about the role of stablecoins in on-chain finance, Nick explained how stablecoins have the best qualities of both cryptocurrencies (such as security and decentralization) and fiat currency (stability and steady price evaluation). He went on to point out that these attributes make stablecoins the ultimate tool to address some considerably large challenges in the broader financial system, including the need for:

• Faster, more inclusive global banking
• Cross-border money movement
• Access to the USD and store of value
• Near instant settlement

Most industry experts predict stablecoins will play a significant role in these solutions, along with many others.

Stablecoins: issuance & regulation

The discussion touched on how Paxos Trust (regulated by the New York Department of Financial Services or NYDFS) is the sole issuer of PayPal USD, and what that means to the market:

• Paxos is subject to strict regulatory oversight by the NYDFS.
• Reserves are held 100% in US dollar deposits, US treasuries and cash equivalents – meaning that customer funds are always available for 1:1 redemption with Paxos.
• Under New York banking law, in the event of Paxos Trust insolvency, segregated customer assets could not be used to satisfy Paxos’ debts because client assets are protected from bankruptcy by law.

Nick also shared how other stablecoin issuers may make similar assertions, but in reality, no other token issuer can promise the type of customer protections provided by Paxos. He supported his point by noting that the difference between Paxos and other token issuers is that Paxos Trust has a primary prudential regulator in the NYDFS, which holds Paxos to the above protections.

How Chainlink helps drive adoption of PayPal USD

During the conversation William and Nick spoke about how Chainlink’s PayPal USD price feed on the ethereum mainnet will accelerate adoption of PYUSD. Secured by the industry-standard oracle network Chainlink, the PYUSD price feed allows users to view accurate, reliable and decentralized market data for PYUSD on the blockchain. Users can now easily access the information needed to help create secure markets around PYUSD—and adopt it as their preferred stablecoin to facilitate on-chain payments.

Huge market for tokenized assets

William and Nick spoke about the significant potential for tokenization and stablecoin use, as some estimates see as much as $5T of global assets moving to stablecoins and other digital money formats by 2030. This means that stablecoins have the opportunity to make a huge impact in the space, especially with trusted companies like PayPal leading the way in regulated stablecoins. 

Stablecoin adoption and expanding use cases

To wrap the interview, William and Nick highlighted how the key to driving adoption of on-chain finance is showcasing the utility of the technology. As an example, they provide proof of the role of stablecoins in the future of global money movement in the latest announcement from PayPal, who last week announced that Xoom, A PayPal Service, will begin to offer zero transaction fees on remittances funded in PYUSD to users in more than 160 countries. This is an incredible use case that will impact the amount of money real people can send and receive globally, and such utility is key to adoption of on-chain finance.

The key takeaway?

While we are still in the early stages of stablecoin adoption, the opportunity is huge. For financial institutions, fintechs and more, there is a projected trillion dollar shift to digital assets on the table. For users, there is a real impact on how they can benefit from this shift, most notably in how easily and efficiently money can move globally. For an industry in need of fortifying its infrastructure and to their end users, who may stand to benefit the most, it’s good news for all, as stablecoins are quickly bringing us to the future of finance. 

Paxos was thrilled to have this live discussion on X with William and the team at Chainlink and look forward to many more opportunities to collaborate to build a more inclusive, cost-effective and efficient financial system.