- PayPal launched a new stablecoin to deepen its interest in the crypto industry. The new PayPal token is PYUSD, and it has already kicked off with new users.
- However, a blockchain researcher stumbled on a feature in the stablecoin. Apparently, this new feature can freeze stablecoins and wipe them off if needed.
PayPal showed they have a deep interest in the crypto industry after they launched their stablecoin PYUSD. Apparently, this new token is a verification and solidification of a venture they started in 2020. Then, PayPal allowed the integration of crypto into their payment systems. Furthermore, this was shortly before the memorable bull market kicked off. Nevertheless, the unveiling of PayPal’s stablecoin made researchers study the token. After the research, one of them found some scary facts about the new stablecoin.
PayPal’s Stablecoin Launches Amidst Support from the Crypto Community
On the 7th of August, PayPal made a surprising announcement on the X platform, saying they want to launch a new stablecoin. PayPal said:
“Today, we’re unveiling a new stablecoin, PayPal USD (PYUSD). It’s designed for payments and is backed by highly liquid and secure assets. Starting today and rolling out in the next few weeks, you’ll be able to buy, sell, hold, and transfer PYUSD.”
The post immediately caused a sporadic reaction from the crypto community. Apparently, everyone was happy about the new development, citing PayPal’s journey in the crypto industry. Moreover, PayPal’s stablecoin signifies the increasing adoption of cryptocurrencies among institutions. The post on the X platform got more than 13 thousand likes with over 7 thousand engagements. In fact, there’s excitement among those in the crypto community about the significance of the launch.
But there’s a new finding which might dampen some people’s hopes. PayPal’s stablecoin has a feature that many consider to be scary.
PayPal’s Stablecoin Raises Concern With a New Feature
A blockchain researcher made down findings regarding PayPal’s stablecoin. Some of his conclusions seem very scary and, at the same time, insightful. Pashov, an expert in smart contracts security reviews, said the new stablecoin had a unique feature.
“The new Paypal USD stablecoin has an “assetProtection” role which can wipe your balance in two transactions (first `freeze`, then `wipeFrozenAddress`)
In smart contract security, we call this a “centralization attack vector,” Pashov said.
Apparently, this new feature from PayPal will allow them to freeze assets and even wipe them off. This is the part that scared many users. However, this feature only applies when the wallet containing the stablecoin is a suspect of scams, money laundering, and even terrorist funding.
Moreover, Pashov came back to his statement, saying other stablecoins like USDT and USDC had the same feature.
Conclusion
The crypto industry experienced happiness when PayPal announced the launch of its new stablecoin. However, some blockchain researchers found a new feature on the stablecoin that seemed scary. Furthermore, the new feature could freeze funds and wipe account balances. However, the same feature is in USDT and USDC.
