PayPal Stablecoin To Change DeFi? The PayPal USD PYUSD Limitations You Didn't Know

In a recent interview with Jose Fernandez da Ponte, Senior Vice President of Cryptocurrency and Digital Currencies at PayPal, he discussed the development vision, use cases, and advantages of PayPal's stablecoin PYUSD compared to other stablecoins. However, with PayPal's strong momentum in launching PYUSD, are there really no downsides? What limitations might you be unaware of in its usage?

PYUSD Transfer Restrictions! Weekly Limit of $10,000

According to the official cryptocurrency terms of PayPal, users are subject to restrictions when buying, selling, converting, and transferring cryptocurrencies. The following are the standard transaction limits:

• Weekly trading limit: $100,000
• Weekly transfer limit: Total of $10,000 in transactions
• Minimum purchase amount of crypto assets: $1
• Minimum sale amount of crypto assets: $1
• Minimum conversion amount between PYUSD and other crypto assets: $2
• Minimum transfer amount to other PayPal cryptocurrency centers: Total of $0.01 in crypto assets
• Minimum transfer amount to external wallet addresses:
  BCH: 0.01 BCH
  BTC: 0.001 BTC
  ETH: 0.01 ETH
  LTC: 0.01 LTC
  PYUSD: 10 PYUSD

From the restrictions, it can be seen that although PayPal has advantages in the minimum buy and sell amounts of crypto assets compared to some exchanges, the weekly trading and transfer limits are relatively low. This may easily reach the limit for users with a larger volume of crypto assets. Additionally, these restrictions may also impact the use of PYUSD in external ecosystems such as DeFi protocols, as there are transfer limits to external accounts.

In addition to common transaction fees, PayPal also charges a spread fee excluding PYUSD

In addition to the above restrictions, buying and selling cryptocurrencies on PayPal also incur certain transaction fees, with the following fee standards:

However, in addition to transaction fees, PayPal also charges a spread fee when users buy, sell, or convert crypto assets. This means that after obtaining the price of crypto assets from the trading service provider, PayPal adds approximately 0.5% as a spread fee, making the cost of each transaction higher for users.

Note: Transaction fees do not include PYUSD, and no spread fee is charged when purchasing PYUSD.

PayPal's Restrictions on Illegal Activities, User Assets May Be Frozen

Finally, as a centralized institution, PayPal also imposes restrictions on illegal or malicious activities, including:

• Using funds that PayPal deems fraudulent to purchase cryptocurrencies
• Initiating transactions that are not intended to be completed or that aim to abuse, manipulate, or mislead other participants in the crypto asset market
• Sending and receiving crypto assets for any illegal purpose or related to any illegal activities
• Engaging in activities intended to deceive PayPal, other PayPal users, or any other individuals
• Controlling and participating in accounts associated with restricted activities

If any of the above behaviors are violated, the functionality of buying, selling, and transferring cryptocurrencies may be restricted, and PayPal may further freeze user assets.