PayPal 's new stablecoin — known as PYUSD — has the potential to facilitate payments , but it must overcome several headwinds before it takes off, Bank of America said. "Over the longer term, we expect PYUSD to experience additional adoption headwinds as competition from [central bank digital currencies] and yield-bearing stablecoins increases," the analyst added. "Over the longer term, we expect PYUSD to experience additional adoption headwinds as competition from CBDCs and yield-bearing stablecoins increases," he said. "Investors may have been fine holding non-yield bearing stablecoins, such as USDT and USDC, when rates were close to zero, but yield-bearing stablecoins will likely become increasingly available and attractive." Instead, Bank of America expects PYUSD to target the "largely untapped" market for blockchain-enabled asset transfers, payments and remittances.

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Persons: —, headwinds Shah, PYUSD, Shah, — CNBC's Michael Bloom Organizations: PayPal, Bank of America Locations: U.S