A cryptocurrency that will help Ethereum blockchain significantly increase the number of users is named

JPMorgan investment bank analyst Nikolaos Panigirtzoglou is confident that the launch of the PYUSD stablecoin by PayPal will help attract more users to the Ethereum network. The expert stated this in an interview with The Block.

Panigirtzoglou suggested that thanks to PYUSD backed by the US dollar, many more companies will choose Ethereum or second-tier blockchain scaling solutions in the future to create stablecoins or DeFi projects. As a result, the analyst said, this will increase activity on the Ethereum network and make it more useful for users.

According to Panigirtzoglou, an additional advantage of PYUSD for Ethereum is that the token will be able to fill the void created by the reduction in the volume of BUSD stablecoins by $ 20 billion. In early February, the New York State Department of Financial Services (NYDFS) demanded that Paxos Trust stop issuing new BUSD due to security violations. In July, Binance announced that it would disable five BUSD trading pairs at once.

However, some experts have criticized PayPal for choosing the Ethereum network to launch PYUSD, given the high transaction fees on this blockchain. For example, Sei Network co-founder Jayendra Jog said that the fees for using PYUSD would be huge, and traders would not want to use it. To improve the user experience, PayPal will either have to pay transaction costs or enlist the support of PYUSD on other blockchains with lower fees, Jog explained.

Panigirtzoglou added that PayPal’s stablecoin will allow combining traditional and decentralized finance. However, it is worth noting that the regulatory framework for stablecoin issuers in the United States is still under development, and regulators may tighten control over them in the future.

It is worth reminding that after the recent launch of PYUSD, many fake PayPal USD stablecoins appeared on the Ethereum, BNB Chain, and Base networks.