-
Better Stablecoin Buy: PayPal vs. Ripple (XRP)
Key Points
There are two up-and-coming stablecoins that are starting to make some noise right now within the $250 billion stablecoin industry: PayPal USD (CRYPTO: PYUSD) and Ripple USD (CRYPTO: RLUSD). Both now rank among the top 10 stablecoins by market cap, and both have an expanding set of potential use cases.
$1 Forever
It's important to point out that "better buy" in this context does not mean "better investment." Both PayPal USD and Ripple USD are stablecoins pegged 1:1 to the U.S. dollar. Theoretically, you should be able to exchange either one for $1 at any time.
Years from now, both will still be trading for $1. There won't be a "better investment" as neither will change in price unless one loses its dollar peg. There won't be any meaningful way to compare them head-to-head.
To determine which one is the "better buy," utility is the best possible litmus test. In other words, how can we utilize or deploy these stablecoins in our everyday lives?
PayPal's Stablecoin
PayPal USD appears to have the clear advantage in terms of utility. As PayPal's official stablecoin, it launched in August 2023. Recently, it has been in the spotlight due to rapid growth within the stablecoin industry.
PYUSD can be integrated into the PayPal experience. For example, in the PayPal app, you can see your PayPal balance, several other PayPal accounts, and your PayPal crypto account. It's easy to move money among these accounts, and you can earn a 4% return on PYUSD holdings.
Plans are underway to make PYUSD a bigger part of the PayPal e-commerce and merchant experience. This means it will become easier to use stablecoins at checkout or integrate them into the cash management process at small businesses.
These factors help explain why PYUSD now has a $2.7 billion market cap.
Ripple's Stablecoin
In contrast, RLUSD is primarily aimed at making cross-border payments. For example, if you have friends or family living abroad, you can send RLUSD to them for conversion into their home currency. Since it runs on blockchain rails, it's potentially cheaper, faster, and more efficient than traditional methods like Western Union.
However, RLUSD is mainly intended for banks making cross-border payments, not individuals sending money abroad each month. RLUSD requires a cryptocurrency wallet, which might present a steep learning curve, particularly for older family members living outside the United States.
Ripple, creator of the RLUSD stablecoin, is also behind XRP, the high-risk, high-reward crypto token. Initially, there was speculation about advantages to holding RLUSD while using XRP for decentralized finance (DeFi).
However, DeFi is underdeveloped on the XRP blockchain at this stage, and there isn't an immediate reason to acquire RLUSD. It's still better to deploy stablecoins on other blockchains.
And the Winner Is...
For these reasons, PayPal USD is the clear winner. It is the only stablecoin I hold outside USDC, and for good reason. Easily integrated into any PayPal workflow, it is backed by one of the world's top fintech players.
If you're looking to get involved with stablecoins, PayPal USD offers an attractive potential entry point.
Should You Invest $1,000 in PayPal USD Right Now?
Before buying PayPal USD, consider this:
The Motley Fool Stock Advisor analyst team recently identified what they believe are the 10 best stocks for investors to buy. PayPal USD wasn’t one of them. The 10 stocks that made the cut could produce substantial returns in the coming years.
Consider when Netflix made the list on December 17, 2004—investing $1,000 at that time could have grown to $576,882. Or when Nvidia made the list on April 15, 2005—$1,000 could have become $1,119,006.
Stock Advisor’s total average return is 1,002%, significantly outperforming the S&P 500's 190%.
See the 10 stocks »
This article has been published in fool.com via Yahoo News.
Better Stablecoin Buy: PayPal vs. Ripple (XRP)
When it comes to overall utility, this $2.7 billion stablecoin really stands out.
finance.yahoo.com
