TL;DR Breakdown
- PayPal working on developing a stablecoin
- Coin to be backed by USD.
- Executive says the purpose of the stablecoin is to make payment.
Global payment mammoth PayPal has said that it is working on launching its own cryptocurrency – a stablecoin.
“We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators,” Jose Fernandez da Ponte, senior vice president of crypto and digital currencies at PayPal said in a statement to Bloomberg News.
Fernandez da Ponte said recently that the company has “not yet seen a stablecoin out there that is purpose-built for payments.” For PayPal’s use, he said a stablecoin would need to support payments at scale and have security.
Why stablecoin for PayPal?
Evidence of the company’s exploration into building a stablecoin was first discovered in PayPal’s app by developer Steve Moser.
Hidden code and images show work on what is dubbed a “PayPal Coin.” The code indicates such a coin had references to possible compatibility with the NEO cryptocurrency.
NEO is a smart contract blockchain developed primarily in China and was known as the Chinese Ethereum. It enjoyed a lot of popularity during the boom of 2017-2018, mainly because it was promoted as one of the first Ethereum killers.
Also, the development of a stablecoin model offers certain advantages for the payment firm. For example, it avoids the regulatory pressures that exist around the more volatile and decentralized cryptocurrencies, it provides peace of mind to customers that the amount they hold in their wallets will have the same value over time. It is also better suited to the payment firm business model, which is essentially a licensed money transmitter.
The payment firm has engaged in a major cryptocurrency effort in recent months, launching new features to buy and hold the digital coins as well as the ability to pay for purchases using the monies.
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