Paypal ́s New Stablecoin: A game changer for the financial world

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Welcome to The Menu Magic - Finance & AI newsletter

In today’s email:

• Paypal´s New Stablecoin: A game changer for the financial world

• BloombergGPT LLM lessons

• Meme of the week

Paypal´s New Stablecoin: A game changer for the financial world

Hey there, my dear friend! 🌟

PayPal, the global fintech giant, has just unveiled its very own US Dollar Stablecoin named "PayPalUSD" or "PYUSD". This move is not just another addition to the crypto world; it's a significant step that could reshape the future of global payments. Let's break it down.

PayPal's Stablecoin in a Nutshell

From this week onwards, if you're a PayPal user in the U.S., you can:

- Buy PYUSD.

- Transfer it to other PayPal users or to compatible external wallets.

- Make P2P payments using PYUSD.

- Checkout with PayPal using PYUSD.

The best part? Every PYUSD is backed 1:1 by dollars held at Paxos depository trust. So, it's as good as having a digital dollar in your pocket.

Why This Matters

1. Mainstreaming Stablecoins: Previously, stablecoins were a bit niche. They were seen as complex and had a bit of a reputation problem because of their association with the volatile crypto world. But with PayPal's massive user base (430 million active accounts and 200 million monthly active users on Venmo), this could be the push stablecoins need to go mainstream.

2. Changing the Stablecoin Narrative: After some controversies in the crypto world, like the Terra/Luna collapse, stablecoins got a bad rap. But PayPal, with its global reach and trust, can change this narrative. If they expand internationally, they could very well become the go-to global payment method.

3. Competition Heats Up: While other wallets like Cash App and Apple don't natively support stablecoins, PayPal's move might prompt them to reconsider. Especially since PayPal's stablecoin is based on the Ethereum network, which is widely recognized for its decentralization and trustworthiness.

4. Boost for the US Dollar: With the geopolitical shifts and the BRICS nations moving away from the US dollar, there's been concern about the dollar's global dominance. But if stablecoins, especially those pegged to the dollar, become a preferred method of transaction in regions like LATAM and Africa, it could bolster the dollar's position on the global stage.

Some Key Takeaways

- Ethereum is a top choice for launching stablecoins because of its decentralized nature and wide adoption. But that doesn't mean other networks are out of the race.

- Regulatory challenges are given when launching a stablecoin, especially on multiple networks.

- PYUSD has the ability to "freeze & seize" assets, much like other centralized issuers. This isn't a surprise; it's a regulatory requirement.

- The significance of PYUSD? It's a massive step towards legitimizing crypto. PayPal is a trusted name in fintech, and its entry into the stablecoin arena is a testament to its belief in the potential of crypto.

- The "bankruptcy remote" feature of PYUSD means that its reserves are safe from any financial troubles that Paxos or PayPal might face. This makes it a safer choice for users compared to other stablecoins.

Considering the dynamic landscape of the crypto world and the intricacies of global finance, what do you foresee as the key challenges PayPal might face in successfully integrating and popularizing their new stablecoin, PYUSD, on a global scale?

In Conclusion

PayPal's PYUSD is not just another crypto coin; it's a strategic move that could redefine the global financial landscape. With its vast user base and trusted name, PayPal might just be the catalyst that brings stablecoins to every digital wallet.

Got any thoughts or questions on this? Let's chat!

What can you learn from BloombergGPT

Hey there, my fintech enthusiast friend! 🚀

I recently stumbled upon a fascinating paper that I just had to share with you. It's all about Bloomberg's foray into the world of large language models (LLMs) and, let me tell you, it's a game-changer for the financial domain. Grab your favorite brew, and let's dive in!

Introducing BloombergGPT 🌟

Bloomberg, the financial data giant, has unveiled its very own LLM: BloombergGPT. Now, before you ask, "Why another LLM?", let me spill the beans. This model isn't just any LLM; it's specifically tailored for the financial domain. Trained on a whopping 363 billion tokens (yes, you read that right!), it sources data from Bloomberg's vast financial archives and other general-purpose datasets.

The result? A model that outshines existing ones in financial tasks, while still holding its ground on general language benchmarks. It's like having a Wall Street expert and a linguist all rolled into one!

Why This Matters for Fintech Entrepreneurs 🚀

Now, you might be wondering, "That's cool and all, but how does this help me as a fintech entrepreneur?" Well, my friend, the potential is limitless!

1. Customized Financial Solutions: By leveraging a domain-specific LLM like BloombergGPT, you can create tailored financial solutions. Think robo-advisors that understand market nuances or chatbots that can provide in-depth financial insights.

2. Data-Driven Decisions: With such a vast training dataset, BloombergGPT can offer insights and predictions based on historical data. Imagine a tool that can predict market trends based on past events!

3. Building Your Own LLM: Inspired by Bloomberg's success? Why not build your own LLM tailored to your company's niche? With the right data and resources, you can create a model that understands your business like no other.

How to Build Your Own LLM 🛠️

Building an LLM is no small feat, but with the right approach, it's achievable. Here's a simplified roadmap based on Bloomberg's journey:

1. Gather Data: Start by collecting a vast amount of data relevant to your domain. The more diverse and comprehensive, the better.

2. Tokenization: Convert your data into tokens. This step is crucial as it determines how your model will understand and process information.

3. Modeling Choices: Decide on the architecture and parameters of your LLM. This will influence its performance and capabilities.

4. Training: Feed your data to the model and let it learn. This step requires significant computational power and time.

5. Evaluation: Test your model on various tasks to gauge its performance. Refine and retrain as needed.

Wrapping Up 🎁

Bloomberg's venture into LLMs is a testament to the potential of AI in finance. As fintech entrepreneurs, we have a golden opportunity to harness this power and create groundbreaking solutions.

Thinking of building your own LLM? Remember, it's not just about the tech; it's about understanding your domain and meeting the unique needs of your audience.

Until next time, keep innovating and dreaming big! 🌌

P.S. If you want to deep dive into the technicalities, check out the [original paper](). It's a treasure trove of information!

Meme of the week

I'd love to hear your feedback on today's newsletter! Is there a specific type of content you'd like to see more of in the future? Since I'll be releasing a new edition each week, I welcome any suggestions or requests you may have. Looking forward to hearing your thoughts!

The Menu Magic is written by Francisco Cordoba Otalora, a Fintech entrepreneur living in London.

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