[repomies69]

They can freeze it, but on the blockchain. As far as I understand, people can observe how much freezing happens overall, from the blockchain. This is superior feature IMO. There are tons of "paypal froze my money" all over the internet, but it is next to impossible to verify how much that is actually happening. With blockchain-based stablecoins we should know precisely the percentages of money being freezed.

[Semaphor]

Would they need to freeze it on the chain? As they hold the keys, they are acting as custodian and can do their own freezing.

[yieldcrv]

You can withdraw Paypal USD and self custody it onchain, and use it with the same flexibility as any ERC20 token.

But this token does have code to freeze your balance of itself, an action controllable by the token contract administrators, which is Paypal.

this is seen in other similarly structured stablecoins.

but the fungibility of being an erc20 token means offloading it is very easy too, there would therefore be no limitations on transfer amounts, no delay in having liquidity based on the time of day or day of the week. No need to rely on Paypal’s interest in redeeming the token for cash again, as you could just swap them onchain for something else more liquid or more speculative the instant you wanted.

[Semaphor]

Interesting, thank you

[earnesti]

I kind of assumed that you can self-custody paypalusd. Otherwise, what would be the point?

Of course self-custody is a bit misleading as they are any way IOU notes.