Paypal Holdings Inc. has publicly confirmed its plans to launch their stablecoin in line with its cryptocurrency push. The reports of Paypal’s stablecoin were first published by Bloomberg following the discovery of evidence of the move from Paypal’s iPhone app by developer Steven Moser.
The developer discovered hidden codes and messages that showed the company is working on “Paypal Coin.” It happens to be the company’s stablecoin, backed by the US dollar.
Jose Fernandez da Ponte, senior vice president of crypto and digital currencies at PayPal, has confirmed that the company is indeed working on stablecoin. He told Bloomberg, “We are exploring a stablecoin; if and when we seek to move forward, we will, of course, work closely with relevant regulators.”
Paypal also confirmed that the hidden codes and images that revealed the company’s stablecoin were found following an internal hackathon. The company’s engineers teamed up to explore and build several products, some of which might never be released publicly. This means Paypal’s stablecoin ultimate features, logo or name can still be up for changes.
Paypal in-roads to the cryptocurrency world.
Paypal has considerably grown its reach in the crypto world in recent years. The platform started supporting the purchase of select digital currencies in November 2020. In March, it introduced a “Checkout with crypto” feature that allows online shopping using digital currencies.
While the Paypal app currently only supports the major digital currencies like Bitcoin, Ethereum, Litecoin, and Bitcoin Cash, it plans to include other tokens like Neo. The digital payments provider is also willing to start working with regulators outside the US market to support a broader range of digital currencies.
The more tokens the platform supports, the more users and traders it can attract, increasing its dominance in the financial processing world. Introducing a stablecoin is also a way to increase its service delivery and market share.
Paypal has also heavily invested in customer crypto education and supports safe transfer of tokens from the platform to other third-party crypto wallets.
Will Paypal Stablecoin be successful?
It’s a little too early to state whether Paypal stablecoin would be successful. However, it comes with an edge over other stablecoins as it would be purpose-built for payments. Right now, there’s no such stablecoin designed for payments. This increases the chances of success for Paypal’s stablecoin following Bitcoin processing more payments than Paypal in 2021.
At the same time, the company has to deal with the lack of clarity in regulations, regulatory framework, and the licenses needed to operate a stablecoin.
Already, some companies have been exploring stablecoins for a considerably more extended period. Meta, formerly Facebook, has been working on its stablecoin, Diem, while Visa, a leading financial service provider, has started supporting US dollar-backed stablecoin transactions.
The company has confirmed that the platform has over 375 million active daily users and 30 million merchants. While it charges no fees for holding cryptos, it levies fees on transactions and currency conversions.
The massive number of daily active users means Paypal already has the user confidence; this means higher chances of success if it were to launch the stablecoin.