PayPal has announced (although not willingly) that it is working on its own stablecoin as it tries to propel itself even further into the crypto space.
What’s happening: The beans were spilled after a hackathon where developer Steve Moser saw logos and hidden code for a “PayPal coin” that appeared to be backed by the U.S. dollar in PayPal’s iPhone app. The company confirmed the project after it leaked.
- PayPal’s VP of crypto and digital currencies said the company intends to work closely with regulators in adhering to guidelines if and when they launch a stablecoin.
- In 2020 the company introduced cryptocurrency trading and in March 2021 they made crypto a payment option alongside debit and credit cards.
Stablecoins offer cryptocurrency investors and consumers a safe harbour where they can hold digital currency but avoid the volatility of tokens. Unlike Bitcoin or Ethereum, the value of stablecoins is tied to a tangible asset, generally a strong currency like the USD or EUR.
- Stablecoins offer a low cost, fast and safe payment option competitive against what consumers and businesses are used to today.
There seems to be a race among established companies to develop the stablecoins in an attempt to disrupt traditional payment providers.. Meta (formerly or forever known as Facebook) had announced plans of its own for Diem, a currency that never saw the light of a computer screen after facing backlash from the public and lawmakers.
Big Picture: The success of PayPal’s coin could mean massive savings for the payments giant as it could potentially circumvent banks and avoid paying processing fees to credit card companies like VISA and Mastercard.