PayPal is planning to launch its own stablecoin backed by the U.S. dollar. In recent months, PayPal has been making inroads into the cryptocurrency market, launching new features that allow users to buy, hold, and spend digital coins.
Let us first understand what PayPal is and what stablecoins are.
PayPal is an online payment platform that offers individuals and businesses low-cost services. It also offers services including debit cards for payments, credit card readers for small merchants, and lines of credit.
A stablecoin is a cryptocurrency that is backed by a reserve asset like fiat currency, commodity, or even other cryptocurrencies.
Why Is a Payment Platform Like PayPal Planning to Have its Own Stablecoin?
PayPal is already a financial app that supports some popular cryptocurrencies. With PayPal having its own stablecoin, it will offer the best of both worlds. The fast processing and privacy of cryptocurrency transactions and the centralised, more stable values of fiat currencies.
In addition, PayPal exploring to launch its own stablecoin sends an upbeat acceptance of crypto in the financial sector. PayPal is considered a very secure method of sending payments online, and their venture into the crypto space shows that crypto is becoming mainstream.
Perhaps the most intriguing aspect of Paypal’s foray into stablecoins is how the news was made public.
A developer named Steve Moser discovered references to something called “PayPal Coin.” He noticed the hidden code and images in Paypal’s app. It was later confirmed by a PayPal spokesperson that the images and code are from a recent internal hackathon.
Initially, the company denied the claims but eventually admitted that it was looking into creating its own coin upon being asked by various media outlets. PayPal senior vice president of crypto and digital currencies Jose Fernandez da Ponte confirmed Moser’s findings.
He further said, “We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators.”
While the company’s existing support for cryptocurrencies is limited to Bitcoin, Bitcoin Cash, Litecoin, and Ethereum, PayPal Coin or whatever name PayPal will give to their stablecoin will be backed by the U.S. dollar. This would make it easier for the average PayPal user to adopt digital currency for everyday use.
Any guesses on what PayPal’s stablecoin will be called?
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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