The Race for Stablecoin Supremacy: Tether vs New Players like PayPal
Introduction
The race for stablecoin supremacy heats up as industry experts debate the role of Tether and new players like PayPal enter the arena.
Ethereum’s Dominance
Jamie Coates, Bloomberg Intelligence expert, points to the increasing dominance of Ethereum (ETH), highlighted by adoption metrics of the mainnet and second-tier projects like Optimism, Arbitrum, and Base.
Ethereum’s Scale-Up Roadmap
Ethereum’s scale-up roadmap is expected to significantly reduce Layer 2 transaction costs, thanks to the highly anticipated EIP-4844. This comes as PayPal recently launched its stablecoin PYUSD, fueling speculation that it may develop its own Layer 2 network.
The Rise of Stablecoins
The expert also predicts that stablecoins could overtake Bitcoin’s user base in 3-5 years, driven by trade integration, product innovation, and scalability. This is in line with recent data showing a record 17.4 million addresses containing more than $1 in stablecoins, a sevenfold increase since 2021.
Tether’s Challenges
Cryptocurrency expert Adam Cochran points out that tether peg is extraordinarily broken despite open banking in Asia, Europe and the upcoming US market. He attributes this to selling pressure from Binance-backed stablecoin accounts and hints that Binance CEO Changpeng Zhao (“CZ”) may be pushing new stablecoins.
The Tether Controversy
A spat broke out on Twitter between Tether’s CTO Paolo Ardoino and CZ. Arduino claimed the alien transactions were “attacks” against Tether, while CZ described Tether as a “black box”, preferring its stablecoins, TUSD and FDUSD.
The Support for USDC
Circle CEO Jeremy Allaire praised USDC’s openness and ease of trading, adding another voice to the complex debate over the dominance of stablecoins.
Conclusion
As the race for stablecoin supremacy continues, the role of Tether and new players like PayPal is being closely watched. The dominance of Ethereum and the rise of other stablecoins contribute to the complex landscape of the stablecoin market. With the potential for stablecoins to overtake Bitcoin’s user base and the controversies surrounding Tether, the future of stablecoins remains uncertain but highly promising.
