If the USD is backed by nothing but faith, confidence, and (arguably) oil....and PayPal is backed by USD... Then what isn't this technically just shit backed by shit?
It's good for cryoto, if it enables people to move from PayPalUSD to cryptocurrency with no limitation. However, limitation is the biggest problem with PayPal. I doubt movement between crypto and PayPal's stablecoin will be seamless or limitless.
The main reason PayPal is doing this is for database integrity via the blockchain ledger, making all payments traceable while reducing the liability and costs involved with the amount of data they process daily. There will probably be a massive scalability boost if the blockchain they use has a reasonable TPS....
Though that's another question. If PayPal is going to make all balances backed by its stablecoin eventually, what chain will it be deployed on and can it keep up with PayPal's TPS?
[1] The USD is backed by the credit of the American government and America's military as what was shown when Saddam Hussien declared that Iraq will begin using the Euro for oil trades. They were invaded only 1 month after this declaration.
[2] Also, many people in the bitcoin community say that the dollar is shit, however, in what currency do we price bitcoin? What are the proposals and how to price bitcoin away from shit?
[3] You also mention that Paypal's stablecoin will be good for the cryptospace if it can be moved in the cryptospace without limtation? According to your words, it is shit. Why would you want more shit in the cryptospace?
Credit is shit. Military is where all the money went, and why the gold standard was eventually abolished. The invasion of Saddam Hussein is only one of many war crimes that the US have committed with the power they have amassed via the fiat money scam.
What better opponent to give Bitcoin than the once unopposed, all powerful reserve currency of the world? As Bitcoin has grown, USD has lost its power. As BTC continues to grow, USD will continue to lose its power. That is what the price truly reflects.
When you convert or redeem PaypalUSD you are able to convert shit to Bitcoin. Just like you can convert USD to BTC. If it's possible, it's another funnel of demand for Bitcoin.
You said that stablecoins are shit backed by American dollars which is also shit. Bitcoin's price is based on dollars and also backed by dollars. The market cannot exist without dollars. Does this imply that bitcoin is also backed by shit also?
You also said that you wish to witness Paypal's stablecoin would make it easier for inflows into bitcoin. This clearly implies a possbility of a pump that might become a bubble if this occurs. However, what would happen if people want to dump their bitcoin because they want dollars?
I will not be a hypocrite and tell everyone that I do not want to witness a big pump on bitcoin, however, mixing idealism with our speculative investments and having a position that say we are better, the other coins have no right to continue might not be a very good position to have.
However, I agree on the argument on stablecoins. I have always speculated that they might have fractionalized already. If the speculation is correct then stablecoins are fractionalized currencies backed by fractionalized currencies hehehehe.