Traditional financial giants Bank of America and PayPal are making bold moves in the stablecoin sector, signaling the rising institutional interest in the sector, which is worth over $200 billion.
On Feb. 26, reports emerged that the Bank of America would introduce a stablecoin once the US regulatory landscape became apparent.
At the same time, PayPal revealed that it was working to expand the role of its PYUSD stablecoin within its payment ecosystem.
Bank of America’s stablecoin ambitions
Brian Moynihan, President of Bank of America, has hinted at the bank’s potential entry into the stablecoin market.
He acknowledged that stablecoins function similarly to money market funds or bank accounts with check access. According to Moynihan, regulatory approval remains the primary barrier to launching a USD-pegged stablecoin.
He reportedly said:
“If they make that legal, we will go into that business.”
His statement reflects the bank’s readiness to enter the sector once regulations permit. He also suggested that a future “BofA coin” could be tied to dollar deposit accounts, though he questioned its broader utility.
Moynihan’s statement is unsurprising, considering he had previously said that the US banking industry would embrace cryptocurrencies for payments if regulators allow it.
Bank of America is the second-largest bank in the United States, with total assets of $2.57 trillion.
PayPal’s PYUSD expansion
On the other hand, PayPal is actively working to integrate PYUSD into its payment ecosystem to boost its adoption.
Michelle Gill, a PayPal executive, detailed plans to embed the stablecoin deeper into its platform by enabling merchants to use PYUSD for vendor payments through PayPal’s network.
Beyond that, the company would also focus on incorporating PYUSD for international payments.
The executive explained that PayPal aims to eliminate currency conversion complexities and reduce transaction delays that plague the traditional system by integrating PYUSD into its cross-border payment system.
According to Gill:
“A lot of the payments we’re expecting are going to be cross-border because merchants in the US are seeking to pay vendors and suppliers abroad. The thesis was: Can we facilitate that on PYUSD rails so as not to have the currency conversion, the friction, as well as time?”
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