PayPal, one of the US’s Fintech behemoths, reportedly revealed its plans to pursue the introduction of a stablecoin as part of its cryptocurrency drive in recent years after evidence of the move was uncovered in its iPhone app. Even though this stablecoin concept appears to be in the works, it is still in its early stages.
Stablecoins are cryptocurrencies that are tied to the value of fiat currency or a reserve asset (precious metals) such as gold, silver, or other precious metals, and are more stable than their decentralized equivalents.
Tether (USDT) and USDC, the two most valuable stablecoins by market capitalization, are designed to be worth $1 at all times. They assist users in navigating blockchain-based platforms that do not use traditional currencies due to regulatory or other reasons, and they keep their value so that people can transfer their holdings.
Steve Moser discovered some images and hidden codes for the PayPal Stablecoin within the PayPal app and shared the details with Bloomberg. This helped indicate that a forthcoming PayPal stablecoin is in the works. Based on what Steve discovered, the US dollar will back the PayPal Stablecoin which implies its value will be tied to the US dollar.
“In response to Moser’s findings, Bloomberg reported that PayPal senior vice president of crypto and digital currencies Jose Fernandez da Ponte has validated the findings,” according to the report.
“We’re looking towards a stablecoin,” Fernandez da Ponte told Bloomberg. “Of course, we will cooperate closely with necessary regulators if and when we decide to proceed ahead.”
According to a spokeswoman for the company’s blockchain, crypto, and digital currencies division, the information Moser discovered in the software were remnants from an internal hackathon.
PayPal has taken proactive attempts to promote crypto-related services outside of the United States, in addition to introducing its stablecoin. You can explore more at bwcevent.com for a better guide.
The business announced the launch of new Bitcoin trading services for the UK market in September 2021.
PayPal started supporting the buying of distinct digital coins in late 2020. The platform eventually made available the “check out with crypto” payment option early last year. This has enabled customers to make several purchases with crypto assets.
Presently, Paypal only supports the use of Litecoin, Bitcoin, Ether, and Bitcoin Cash. However, PayPal is not planning to stop there. The giant payment platform is aiming to start accepting Neo tokens while also deeming to launch its stable coin.
In an earnings call that took place last year, PayPal shared its proposal for a unique business unit as regards its crypto objectives. These included joining forces with regulators beyond the US market to accept its stablecoin.
The implication of launching the stablecoin
A stablecoin designed just for payments
Fernandez da Ponte recently stated on the Unchained podcast that the firm doesn’t know of any stablecoin out that is primarily built for just payments. For Paypal to adequately use a stablecoin, such a coin would need to allow payments at scale to offer adequate security.
“There is the need to be clear on regulation, legislative frameworks, and the types of licenses that are required in this domain,” Fernandez da Ponte asserted.
As a result, users will be able to trade and store their assets, as well as earn a high rate of return on their investments. Money can also be moved worldwide with low transaction costs and quick processing.
Cryptocurrency usage promotion
The introduction of a PayPal stablecoin could promote cryptocurrency adoption among PayPal’s 392 million customers.
Reduce the risk of volatility
Cryptocurrencies like Bitcoin and Ether have a lot of volatility, sometimes even by the minute. Buyers and sellers can have confidence that the value of their tokens will neither grow nor fall unpredictably shortly if the asset is linked to a more stable currency.
PayPal isn’t the first tech giant to consider developing its cryptocurrency. Facebook, now known as Meta Platforms Inc., was trying to create a stablecoin called Diem. However, the company was faced with several regulatory oppositions and instead created a cryptocurrency wallet known as Novi.
On the other hand, Visa Inc. has been enabling a U.S dollar-backed stablecoin to complete transactions within its network.
