Stablecoins: PayPal wants a slice of the action

Stablecoins, once seen as a straightforward way to keep funds secure whilst operating in the volatile world of cryptocurrency, are now becoming the centre of intense competition and are beginning to be seen as an alternative way to make payments in general. Traditionally, providers such Tether and Circle have thrived by offering stability without the need to pay users any returns. The logic was simple: users were content with the assurance that their money was safe in an industry fraught with risk, especially since DeFi platforms often provided attractive yields for stablecoin holders. Tether, with its market cap of $117 billion and Circle, with $34 billion, have dominated this space by earning interest on users' funds through avenues such as US Treasuries - without sharing these profits with their customers. Tether made $5.2billion in the first half of 2024 and Circle, backed by BlackRock and the Circle,  is now looking to do an IPO - although it is possible to generate a yield on a …