PayPal Stablecoin Launch Being Explored
in Crypto News
Online payment giant PayPal is back in the crypto news headlines, for reportedly exploring the launch of its own Fiat-backed stablecoin.
Bloomberg broke the story after developer Steve Moser discovered evidence of PayPal's study into creating its own stablecoin in the company's iPhone app, and shared it with the media. Work on a "PayPal Coin" is shown through hidden code and pictures. According to Bloomberg, the code indicates that the US dollar would back the coin.
PayPal Confirms Research on Stablecoins
"We are researching a stablecoin," Jose Fernandez da Ponte, PayPal's senior vice president of crypto and digital currencies, said in a statement to Bloomberg News. "If and when we seek to move forward, we will, of course, work closely with relevant regulators."
Stablecoins are cryptocurrencies backed by the value of an existing currency or commodity and are priced accordingly.
On the Unchained podcast, Fernandez da Ponte recently said that the company has "not yet seen a stablecoin out there that is purpose-built for payments." He said that a stablecoin would need to allow payments at scale and be secure for PayPal to utilize it.
He noted: "There would need to be clarity on regulation, regulatory frameworks, and the types of licenses that are required in this domain."
A PayPal representative said the images and code in the PayPal app came from the company's blockchain, crypto, and digital currencies division's recent internal hackathon—an event in which developers collaborate to quickly explore and build innovative technologies that may never see a public release.
PayPal was first rumored to be building its own stablecoin in May 2021 when several unnamed sources acquainted with the topic told The Block that PayPal was in talks with some developers, including Ava Labs, about the possibility of launching a stablecoin.
PayPal’s Recent Crypto Efforts
Of course, this isn't PayPal’s first foray into the crypto space. PayPal has been active in its cryptocurrency efforts recently, boosting the amount of cryptocurrency that its customers can buy. The company has also been investing in crypto education while allowing its users to withdraw their crypto to third-party wallets safely.
PayPal launched its crypto payment feature in October 2020, allowing customers to trade, purchase, and hold cryptocurrency. In the late first quarter of 2021, the business began offering crypto capabilities to its 29 million merchants, beginning in the United States.
Also earlier, in April 2020, Venmo, a PayPal subsidiary, debuted its Crypto payment service by allowing Venmo's 70 million users access to crypto payments.
PayPal's deeper exploration into crypto payments comes as no surprise. PayPal’s CEO, Dan Schulman, has continued to be bullish on cryptocurrencies. In an interview with The Time last April, he explained that he expects that the use of cash as a form of payment will drop over the next ten years. He also believes that this will have a negative impact on credit cards and other widely used payment methods such as cheques and wire transfers.
According to Schulman, digital payments can "bring greater value." He elaborated:
“And so when all of those things start to happen, then central banks need to rethink monetary policy as well, because you can’t just issue more paper money into the system because people aren’t using paper money. And so this is the advent of digital currencies.”
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