Traditional financial giants Bank of America and PayPal are making bold moves in the stablecoin sector

The rising institutional interest in the sector, which is worth over $200 billion.

The institutional interest in the stablecoin sector, which is now worth over $200 billion, is continuing to grow, signaled by the latest moves by financial giants Bank of America and PayPal.

At the same time, plans for a stablecoin from the US banking giant could be forthcoming once the regulatory landscape becomes apparent, according to a report by Blockworks on Feb. 26.

Meanwhile, PayPal is expanding the role of its PYUSD stablecoin within its payment ecosystem.

Bank of America's stablecoin ambitions

President of the US banking giant Brian Moynihan hinted at the bank’s potential entry into the stablecoin market.

He noted that stablecoins function similarly to money market funds or bank accounts with check access. According to Moynihan, securing regulatory approval presents the primary barrier to launching a USD-pegged stablecoin.

"If they make that legal, we will go into that business," he stated, highlighting the bank's readiness to launch a coin once regulations permit.

He suggested that a future "BofA coin" could be tied to dollar deposit accounts, though he expressed skepticism regarding its broader utility.

"I'm not sure what else we would do with it, but we're watching it closely and we'll see how it plays out," he added.

Moynihan's statement follows his previous comment that the US banking industry would adopt cryptocurrencies for payments if regulators allow it.

Bank of America is the second-largest bank in the United States, with total assets of $2.57 trillion.

PayPal's PYUSD expansion

On the other hand, PayPal is actively working to integrate PYUSD into its payment ecosystem to boost its adoption.

During a presentation at the Consensus conference in Hong Kong, Michelle Gill, a PayPal executive, detailed plans to embed the stablecoin deeper into its platform by enabling merchants to use PYUSD for vendor payments through PayPal's network.

Beyond that, the company would also focus on incorporating PYUSD for international payments.

The executive explained that PayPal aims to eliminate currency conversion complexities and reduce transaction delays that plague the traditional system by integrating PYUSD into its cross-border payment system.

"A lot of the payments we’re expecting are going to be cross-border because merchants in the US are seeking to pay vendors and suppliers abroad. The thesis was: Can we facilitate that on PYUSD rails so as not to have the currency conversion, the friction, as well as time?" Gill said.