Tether co-founder dismisses PayPal in the world of stablecoins


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William Quigley, a major figure in the stablecoin world and co-founder of Tether recently expressed his opinion regarding PayPal’s arrival in the stablecoin world. 

According to the co-founder of Tether, PayPal’s stablecoin will not innovate at all

In the ever-evolving stablecoin landscape, the recent appearance of PayPal’s PYUSD token has raised concerns within the industry. 

Tether pioneer and co-founder William Quigley, a highly experienced figure in the world of stablecoins, offered his opinion on PayPal’s entry into this emerging space. Having played a key role in the development of Tether, Quigley’s perspective carries significant weight. 

In this article, we delve into Quigley’s assessment of PayPal’s stablecoin ambitions, shedding light on the motivations behind this financial giant’s venture and its potential impact on the stablecoin ecosystem.

Quigley’s assessment of PayPal’s entry into the stablecoin arena begins with a critical observation. 

He argues that PayPal’s primary motivation is to reduce costs, particularly with regard to handling multi-currency transactions valued in the trillions of dollars. This perspective stems from Quigley’s intimate knowledge of the stablecoin market and PayPal’s inner workings.

To appreciate the depth of William Quigley’s insights, it is essential to understand his background. Specifically, not only was he a co-founder of Tether, but he was also an early investor in PayPal. 

His involvement in both entities provides a unique vantage point from which to analyze PayPal’s entry into the stablecoin industry.

Quigley’s observation on innovation

Despite believing in the social benefits of privately issued stablecoins, Quigley expresses skepticism about the innovation potential of PayPal’s PYUSD token. 

He states that PayPal is likely to view this initiative primarily as a means to reduce costs. According to Quigley, it is uncertain whether PayPal will pass these savings on to its users.

Currently, the stablecoin market is unequivocally dominated by Tether (USDT), the largest and most liquid dollar-pegged token. 

It is closely followed by Circle’s USD Coin (USDC). However, given PayPal’s large user base of hundreds of millions worldwide, Quigley recognizes PayPal’s potential to disrupt this established hierarchy.

The mechanics of creating Stablecoins such as Tether’s USDT or PayPal’s PYUSD

Quigley explains the intricate process of creating a stablecoin, a process that requires PayPal to acquire a basket of different currencies. 

These currencies, including yen, euro, rupee, and won, are held in various banks around the world. Once these assets have been tokenized by PayPal, they form the basis of a private, multicurrency money supply that operates independently of the global banking system. 

Importantly, this system avoids third-party intermediaries who traditionally charge fees for currency exchange services.

One of the key advantages of PayPal’s stablecoin network, as described by Quigley, is the elimination of financial intermediaries in cross-border transactions. 

With its private blockchain, PayPal can seamlessly facilitate transactions between users holding different currencies without relying on external financial institutions. This has profound implications, as it eliminates the need for third-party foreign exchange intermediaries and related fees.

The way forward for PayPal

Quigley identifies two potential ways for PayPal to capitalize on its stablecoin network. 

The first is to continue to charge consumers and merchants currency conversion fees, but no longer incur these costs, resulting in a significant profit margin. 

The alternative path is for PayPal to eliminate currency conversion fees altogether, thereby reducing overall cross-border transaction costs for its users. This decision will undoubtedly determine PayPal’s role in the evolving stablecoin ecosystem.

The unexpected return opportunity

In a surprising twist, Quigley reflects on the unexpected developments in the stablecoin market, particularly in terms of the returns generated by large stablecoin operators. 

These entities, which hold large sums in assets such as US Treasury bonds, have reaped significant profits from interest rate increases in recent years.

Quigley admits that he did not foresee this financial dimension at the time of Tether’s founding, demonstrating the ever-changing nature of the cryptocurrency landscape.


In conclusion, William Quigley’s insights into PayPal’s stablecoin ambitions provide an interesting perspective on the motivations and potential consequences of this financial giant’s entry into the stablecoin arena. 

While PayPal’s primary goal appears to be cost reduction, the broader implications for the stablecoin ecosystem and the financial industry at large have yet to materialize. 

As we witness the intersection of fintech and blockchain technology, the actions of industry veterans like Quigley and financial giants like PayPal will continue to shape the future of digital finance.