KEY POINTS
- PayPal's recent use of the $PYUSD in a supplier invoice settlement made waves in the crypto space
- Fireblocks's Ran Goldi said the PayPal's 'brave' decision will eventually 'move the needle' across the corporate world
- Regulation remains a major challenge in broader stablecoin adoption, especially in the B2B aspect
- Fireblocks sees a future where 'all forms of money will be tokenized'
Stablecoins, digital tokens pegged to a more stable asset such as fiat, have reached a staggering $173.5 billion market value since the first stablecoins emerged in 2014. These days, digital coins are gaining traction as cryptocurrency firms explore their utility across different facets of finance.
In recent years, the world's top stablecoins have become very beneficial in the payments segment. More recently, their utility in cross-border trade and other developments have made them an undeniable star in the digital assets space.
In an exclusive with International Business Times, Ran Goldi, SVP of Payments and Network at leading institutional digital asset custody, settlement and issuance platform Fireblocks, discussed the bold move PayPal made with its PYUSD stablecoin, and a future where stablecoins become a "norm" in global payments systems.
PayPal Takes Bold Step with $PYUSD
Earlier this month, it was reported that payments giant PayPal completed its first business payment using the PYUSD stablecoin to settle an invoice with Ernst & Young LLP, marking a significant milestone in efforts toward broader adoption.
Many crypto firms took note of the development, and experts across the industry pointed out that the move marks a new era of business-to-business stablecoin use.
For Goldi, PayPal's move is a "brave" one, considering the company's status as one of the leading fintech firms in the world. "We will see many other payment companies and fintechs follow. That would eventually move the needle, even if by a bit, until the entire financial ecosystem adopts blockchain," Goldi projected.
A Giant Leap Toward Broader B2B Stablecoin Transactions
Goldi revealed that the largest growing segment in the blockchain payments sector today is B2B. "From our view at Fireblocks, we see that B2B payments account for 50% of total payment volume," he added.
PayPal "understands" the revolution and is "making progress toward educating its merchants to upgrade their rails," he said.
So far, PYUSD is seventh in CoinGecko's rankings of the world's largest stablecoins by market value. With a market cap of $673.8 million (as of Sunday night), PYUSD has a long way to go before unseating Tether's USDT.
Still, PayPal's standing as a leader in global payments is a boon for suppliers who may have lingering trust issues when it comes to digital currencies.
The Challenges in B2B Stablecoin Use
In traditional finance, there is already the issue of trust, but there are various other considerations for broader B2B stablecoin use.
Internally, there's the matter of businesses still operating with fiat. "Zooming in, businesses still run on regular, real-world dollars, hence, they sometimes need to off-ramp from stablecoins back to dollars in their bank account," Goldi said.
Then there's regulation – a key issue in the broader blockchain and crypto space that remains a challenge for companies seeking to expand their B2B relations in the traditional financial realm.
"Zooming out, the ultimate challenge is still regulation. Today's view in the U.S. is that banks do not have enough comfort to service crypto-using customers. That is still a big challenge that only legal frameworks and regulations can solve in the long term," Goldi pointed out.
The U.S. has yet to come up with a regulatory framework for digital assets. The U.S. Securities and Exchange Commission (SEC), under Chair Gary Gensler, has refused to engage in new rulemaking to come up with regulations specifically for the emerging industry.
Can Stablecoins Become a 'Norm' in Government?
Beyond business and private finance, governments are also exploring stablecoins and their possible utility in government transactions.
"Stablecoins are being used today by governments across the world to disburse payments to individuals (sometimes even as a purpose-bound money, operated by a smart contract). While consumers will hopefully not feel the difference, eventually, we believe all forms of money will be tokenized, it is just a natural upgrade to existing financial systems," Goldi said.
Paving the Way for Wider Adoption
Amid increasing exploration of stablecoin utility, Fireblocks is at the forefront. It provides the underlying technology that issuers use to create their own stablecoins, issue blockchain wallets to their users, and manage the movement of payments, trades and other funds across the blockchain, in the most secure manner.
Fireblocks already projected back in 2021 that stablecoins "represent the treasury management of the future" for companies of all shapes and sizes.
With a leader in the payments sector proving that stablecoins can be used in B2B transactions, it may only be a matter of time before the "stable" digital currencies become the future of payments.
