Hey, we were all excited when we heard PayPal was launching a stablecoin.

But now we’re wondering, is this like when that one friend orders a round of double-shots at last call? (A seemingly awesome decision with brutal, cataclysmic effects.)

It’s certainly starting to seem that way, as lawmakers and crypto advocates alike begin to voice their concerns.

Could the biggest, latest development in crypto actually be putting it in danger?

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Espresso Shots

☕️ Fed Adds Dropp, HBAR Surges 🏛 📈

The Federal Reserve’s payment service, “FedNow,” has added Dropp to its list of service providers.

Dropp is a micropayment platform that allows merchants to accept crypto payments for as little as a penny.

Dropp is built on Hadera Hashgraph and the news sent HBAR, Hadera’s native token, surging up by more than 16% to a four-month high when the news broke.

It seems that for Hadera, much like a rave girl twirling her glow sticks, it was only a matter of waiting for the Dropp.

☕️ Does Your Crypto Wallet Take Apple Pay? 🪙 🍎

MetaMask will now feature Apple Pay’s one-click service when it comes to buying crypto.

This development was made possible by a coordinated effort between MetaMask and the fintech firm, Banxa.

This update has streamlined several identity confirmation steps and KYC requirements. "It's a little bit more cumbersome versus just selecting the quote, seeing the Apple Pay UI come up, do double-click face ID, and boom, a minute later, you have funds in your wallet." MetaMask Product Manager Lorenzo said in an interview with Decrypt.

Incidentally, though your MetaMask account is now compatible with Apple Pay, it will also include your entire middle-school iTunes library and that one U2 album.

☕️ SBF Bail Revoked ⚖ ❌

It looks like Sam Bankman-Fried will no longer be able to await trial at his parent’s house, as he’s been remanded to jail for possible witness tampering.

The change in SBF’s status relates to his involvement with a New York Times article and the release of Alameda CEO Caroline Ellison’s diary.

Though Judge Kaplan believes a gag order wouldn’t be sufficient in preventing SBF from talking to the media, he may be allowed a laptop in jail.

Naturally, SBF’s lawyers will attempt to upgrade that laptop to a gaming rig.

As for SBF himself, Entrepreneur and Investor Martin Shkreli has a word of advice for personal grooming in the jailhouse…

Spilling the Beans

Is PayPal's Crypto a Trojan Horse? 🐎 ⚔️

We’ve been as excited as anybody about the unveiling of PYUSD, PayPal’s new stablecoin.

But like any wave of enthusiasm, what initially seemed like Crypto-Christmas come early may actually be a development with a host of new problems.

Crypto is in a tenuous position right now, and we’re all awaiting outcomes on four crypto bills that are currently trudging their way through Congress.

And part of waiting patiently for governmental approval is not rocking the boat. But PYUSD’s release isn’t just rocking the boat — this is a tidal wave that could dash crypto’s hopes upon the shore.

Particularly considering that one of those bills, the Clarity for Payment Stablecoins Act of 2023, is intended to clear up the regulatory uncertainty around stablecoins.

So releasing a new stablecoin while that legislation is still underway is certainly putting the cart before the horse.

And it rightfully has some lawmakers… pretty frustrated. Such as Representative Maxine Waters (D-California), who sits on the House Financial Services Committee.

“I am deeply concerned that PayPal has chosen to launch its own stablecoin while there is still no Federal framework for regulation, oversight, and enforcement of these assets. PayPal, with 435 million customers globally, exceeds the number of online accounts at all of the megabanks combined. Given PayPal’s size and reach, Federal oversight and enforcement of its stablecoin operations is essential in order to guarantee consumer protections and alleviate financial stability concerns,” Rep. Waters wrote in a statement released on August 9.

And of course, PYUSD may remind many lawmakers of the failure of Meta’s Libra coin, which garnered a worldwide backlash before being scrapped and sold for parts.

And the launch of PYUSD, like Libra, may be more of a dud than a revolution.

PayPal is massive. It currently has more than 430 million active users who are about to be pitched headlong into crypto.

And that influx of new potential crypto investors may cause lawmakers to act more swiftly on stablecoin regulation, and rushed decisions are rarely the best ones.

Having PayPal brazenly release this stablecoin may result in a punitive decision instead of the foundational clarity we’re all hoping for.

And in addition to American lawmakers, some financial titans like Bank of America (BoA) are already speaking out against PYUSD.

Two of BoA’s Analysts, Alkesh Shah and Andrew Moss, wrote in a research report that was made available to Coindesk that PYUSD’s launch fundamentally won’t lead to “accelerated regulatory clarity” because the stablecoin does not “alter systemic risk for traditional markets”.

Additionally, much of the current legislation centers on whether nonbanks will even be allowed to issue stablecoins.

And because PayPal isn’t technically a bank, PYUSD may be stopped before it can really start.

While PYUSD is certainly an exciting concept, it’s beginning to seem like none of us are ready for this.

The regulatory framework is literally still being written, and our delicate, skittish financial authorities may not be ready for this kind of shake-up.

Maybe PayPal needs to take a good, hard look at its stablecoin plans, before it destabilizes everything.

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It just keeps getting…. worse? 🤦‍♂️

Crypto 101

Micropayments: This usually includes any transaction involving an amount less than a dollar, but the definition includes any transaction with a value beneath a certain threshold.

Micropayments have been around for a long time. Buying a song in the iTunes store was technically a micropayment.

It’s the small fee associated with the digital delivery of intangible goods.

The Last Sip

It appears that SBF will be allowed restricted use of a laptop in jail as he awaits trial. But if SBF’s paying for a proper legal team, they’ll also probably try to get him:

3. An afro pick.

2. A “Perfect Push-Up” that will go totally unused.

1. A broken piece of a bitcoin mining rig that can be fashioned into a shiv.

Stay Caffeinated,

Coffee & Crypto Team

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.