PayPal stablecoin issuer Paxos Trust Company can reportedly freeze users’ funds and transactions.
According to the information for PayPal’s stablecoin PayPal USD (PYUSD) published on GitHub, in case of a serious security threat, Paxos is able to suspend PYUSD’s authorization and transfer functions. In addition, the stablecoin issuer has the possibility to seize or freeze funds and assets that belong to criminal parties if it is required by law. Moreover, addresses that have AssetProtectionRole permissions are able to initiate the freezing and unfreezing of accounts and can wipe the balance of any account.
According to blockchain journalist Colin Wu of Wu Blockchain, Paxos stated that it would not perform the freeze operation itself. Notably, the stablecoins USD Tether (USDT) and USD Coin (USDC) also feature a similar mechanism of blacklist freezing.
Leading online payment platform, PayPal, announced the launch of its stablecoin on Monday, August 7. PayPal USD, which is built as an ERC-20 token on the Ethereum blockchain, can be bought or sold through PayPal at a rate of $1.00 per PayPal USD. The stablecoin is backed by U.S. dollar reserves, short-term U.S. Treasuries, and similar cash equivalents.
Eligible United States-based users already have access to several benefits offered when purchasing PayPal USD. For instance, individuals can transferPYUSD between PayPal and compatible external wallets, send person-to-person payments using PayPal USD, convertany of PayPal’s supported cryptocurrencies to and from PayPal USD, and fund purchaseswith PayPal USD by selecting it at checkout.
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