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On Tuesday, the crypto markets are showing positive momentum, driven by a significant drop in long-term government bond yields worldwide. This decline in yields comes in response to disappointing Chinese trade figures for July. Interestingly, this uptick in the crypto markets coincides with PayPal, a major player in the financial industry, revealing its intention to launch a stablecoin in the near future.
Over the last 24 hours, Bitcoin (BTC) has surged by 1.9%, reaching $29,570, propelling the CoinDesk Market Index (CMI) to a 1.10% overall gain. Notable performers alongside this rise include Solana (SOL), Toncoin (TON), and Chainlink (LINK), all boasting gains exceeding 2%.
In a surprising turn of events, China has announced a significant 12.4% year-on-year plunge in import figures for July, surpassing economists' predictions and more than doubling the anticipated decline. On the export front, the numbers are equally concerning, with a 14.5% drop, surpassing the projected 12.4% decrease. These steep declines haven't been witnessed since the onset of the Covid lockdowns. This development raises concerns that Beijing might need to implement additional measures to invigorate the economy.
The U.S. 10-year Treasury yield has dropped by 11 basis points to reach 3.98%. During one instance last week, the 10-year yield had reached a peak for 2023, coming very close to 4.20%. On Tuesday, there are even more pronounced decreases in yields for long-term government bonds throughout Europe. This trend is evident in Germany as well, where the 10-year Bund yield has fallen by 15.4 basis points to 2.445%.
In additional economic updates, Patrick Harker of the U.S. Federal Reserve remarked that unless there is "alarming" new information, he is comfortable with the central bank's decision to refrain from further increasing rates. Nevertheless, he noted that the possibility of contemplating rate reductions is quite distant at this point.
Don't sleep on PayPal's stablecoin news
Despite the generally lackluster reception of PayPal USD (PYUSD) yesterday, a number of observers maintain a positive outlook on the future expansion of cryptocurrency markets in the long run.
On Monday, PayPal, the prominent payments company headquartered in New York, announced its upcoming plan to offer its own stablecoin named PayPal USD (PYUSD) to its users. This significant move signifies the first instance of a major financial firm issuing its proprietary stablecoin.
Individuals have the ability to seamlessly move PYUSD back and forth between PayPal and compatible external digital wallets. These tokens can be utilized for making purchases of products and services, or for converting between PYUSD and any of the cryptocurrencies supported by PayPal.
“PayPal USD (PYUSD), a U.S. dollar stablecoin issued in collaboration with Paxos Trust Co., is a significant development in the digital finance landscape,” said Jeff Mei, COO of crypto exchange BTSE, in a Telegram message. “Signifying the growing convergence between traditional financial systems and the world of crypto, this news is definitely bullish for the crypto market.”
“If the regulators do welcome this with open arms, we might see more US fintech and payment companies proactively exploring digital currencies, and may even make a concerted shift toward new launches,” Mei said, adding successful launches may help instill confidence in the concept of stablecoins, especially following “last year’s setback Terra USD.
