LianGuaiyLianGuail Stablecoins’ Chain Reaction on the Cryptocurrency Market

The Impact of 'LianGuaiyLianGuail Stablecoins' on the Cryptocurrency Market A Chain Reaction

Author: Victoria Chynoweth, translation by: Shanouba, LianGuai

The launch of LianGuai’s native stablecoin LianGuai USD (PYUSD) has sparked intense discussion within the cryptocurrency industry about its potential impact on payments and wider cryptocurrency adoption.

While this move seems like a big step towards embracing cryptocurrencies in traditional finance, some industry observers suggest proceed with caution. They emphasize potential hurdles and limitations that could hinder broader adoption.

What is PYUSD?

The initiative aims to bridge the gap between fiat currency and digital currency for consumers, merchants, and developers. LianGuai’s CEO, Dan Sherman, highlights the need for stable digital-to-fiat channels. PYUSD facilitates various transactions, including payments, fund transfers between LianGuai and compatible external wallets, and cryptocurrency exchanges.

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“The transition to digital currency requires a stable tool that is both native to the digital realm and easily connected to fiat currencies like the US dollar. Our commitment to responsible innovation and compliance, as well as our track record of delivering new experiences to customers, provides the necessary foundation to drive the growth of digital payments through LianGuai USD.”

The token aims to alleviate payment frictions in the virtual environment, accelerate value transfer, and simplify participation in digital assets by becoming a safer alternative to the volatility of most cryptocurrencies.

PYUSD is an ERC-20 token on the Ethereum blockchain, designed to be compatible with popular exchanges, wallets, and Web3 applications, with plans to expand its availability to Venmo.

While the currency is a step towards narrowing the gap between the traditional financial ecosystem and the digital financial ecosystem, the widespread adoption of PYUSD among LianGuai’s extensive user base of 200 markets remains to be seen.

PYUSD’s regulation is provided by the New York State Department of Financial Services, and LianGuai plans to release monthly reserve reports and third-party proof of reserve asset value starting from September 2023 to increase transparency.

In addition to PYUSD, LianGuai continues to focus on enhancing consumer and merchant education and understanding of digital currencies, complementing its existing services that allow customers to transact with selected cryptocurrencies.

Impact on the Industry

“The launch of PYUSD by LianGuai truly marks the largest payment company to date adopting blockchain technology at a new standard and level of the product itself,” noted Walter Hethert on the American Banker podcast. Hethert is the Strategy Director of LianGuai’s global blockchain infrastructure company, LianGuaixos.

“When LianGuaiyLianGuail entered this field and launched stablecoins, they sent a message to other payment companies, millions of global merchants, and hundreds of millions of consumers using their applications, that stablecoins are a real product,” he added.

The launch of PYUSD sends a message: stablecoins have gone mainstream, extending the benefits of blockchain technology to everyday transactions.

Herbert’s viewpoint depends on LianGuaiyLianGuail’s ability as a promoter of wider acceptance of cryptocurrencies. Digital assets are often limited by their own confined systems and subject to regulatory frameworks. In this context, stablecoins as a bridge between traditional and digital currencies are highly appealing.

Others are attracted by the potential of LianGuaiyLianGuail’s stablecoins spanning multiple systems, believing it will introduce more use cases.

VUCA Digital CEO LianGuain Lorattawut told Cointelegraph, “If LianGuaiyLianGuail’s stablecoin can integrate into cross-ecosystem, exchanges, and wallets, it will add many use cases for digital assets, tokens, and cryptocurrencies, making it a financial leader capable of bridging many digital assets, tokens, and cryptocurrencies for users to enter the crypto world.”

She asserts that the presence of stablecoins that can be easily traded, transferred, and converted to other cryptocurrencies or fiat money will make them more universal and welcome by both crypto natives and new users.

However, Lorattawut is not unaware of related risks. She states, “Despite stablecoins and cryptocurrencies still being a small part of the financial system, if stablecoin scale expands and poses systematic risks to the economy, interest in regulating stablecoins will increase.”

But she also adds that despite long-term regulatory and compliance challenges, LianGuaiyLianGuail entering the crypto space can act as a catalyst for crypto-driven payment systems and promote wider adoption of the crypto market.

Some believe that LianGuaiyLianGuail entering the stablecoin field can open doors for other fintech companies to follow suit. LianGuaiyLianGuail’s move can set a precedent for companies to proactively innovate in Web3.

Others are more contradictory, like Twitter crypto influencer The Wolf Of Crypto Streets.

Shortly after the release of the stablecoin, regulatory agencies issued warnings to banks to stop doing business with LianGuaiyLianGuail, which also decreased people’s attention. US regulatory agencies have recently filed several lawsuits against tech companies that facilitate tokenization of currencies.”

Regulatory and Compliance Challenges

Entering this world is like stepping on a double-edged blade. On one hand, it can spark the flame of a cryptographic payment system, helping more people use digital assets. On the other hand, the scale and influence of this world may attract stronger regulatory attention, leading to stricter inspections and rule requirements.

Regulatory agencies are on high alert. Maxine Waters, the Democratic leader of the House Financial Services Committee, expressed concerns about this world launching its own stablecoin.

“I am deeply concerned about this world’s decision to launch its own stablecoin, while these assets still lack federal regulation, supervision, and recognition,” Maxine wrote shortly after the stablecoin was announced.

Strong regulatory focus may stifle new ideas and take away sympathy from those who value its freedom and largely unregulated nature in the cryptocurrency market.

The Potential of DeFi to Serve the Unbanked

According to the World Bank, around 1.7 billion people worldwide lack access to a bank account, missing out on crucial financial services. The barriers imposed by traditional banking systems hinder their ability to participate in the global monetary game.

By providing opportunities for loans, savings, and investments, DeFi can empower the unbanked and underbanked population, enabling them to access cryptocurrencies and subsequently the global financial system.

Although there have been many articles discussing how DeFi can change the destiny of multiple unbanked nations, it still remains an unrealized dream. There are still several bottlenecks, with regulatory issues being a primary concern.

But if regulations become more aligned with modern thinking and DeFi becomes more easily accepted, can this world’s stablecoin leverage its familiarity to promote the transition from traditional finance to DeFi?

Currently, PYUSD has a strong centralized foundation and has yet to enter the realm of DeFi. While there is still a possibility for it to become more open and venture into the decentralized realm, it seems too reckless and unacceptable at the moment.

The cryptocurrency community is actively pondering the potential advantages and disadvantages of this world’s stablecoin.

While it has the potential to bridge the gap between traditional finance and digital assets, the real concern remains in sticking with the use of Web2 systems, as without banks and regulatory scrutiny, people will not have access to this system.

There’s also an adoption issue. CoinMarketCap ranks this token at 242 as of writing this article. Despite being listed on 4,452 watchlists, people still have concerns about it, with many raising bearish flags.

This indicates that there is still a lot of work to be done for PYUSD to become a household name in the blockchain field. Until then, we can only speculate on how much it will impact the financial ecosystem.

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