- Company says it would work with regulators ahead of launch
- Evidence of ‘PayPal Coin’ work found in company’s iPhone app
PayPal has confirmed it is exploring a PayPal Stablecoin. Here’s how experts see the potential impact of a PayPal Coin. PayPal confirmed on Jan. 8 it is “exploring a stablecoin” that could be called PayPal Coin after a developer found evidence of such a stablecoin within the source code of the company’s iPhone app.
Crypto News: PayPal is exploring the launch of its own stablecoin, the company told me and @jennysurane after @stevemoser found evidence of the work in PayPal’s own iPhone app. “PayPal Coin” would be tied to the U.S. dollar. Story here: https://t.co/jK4O0BZo0n pic.twitter.com/UWmYQhzxH6— Mark Gurman (@markgurman) January 7, 2022
PayPal senior vice president of crypto and digital currencies Jose Fernandez da Ponte said at the time that if the company plans to move forward with the stablecoin, it will do so while working closely with relevant regulators — an approach that could help the fintech firm avoid the wrath of United States senators that doomed Meta’s Diem cryptocurrency project.
The company has clarified that the source code found on its iPhone app was developed in an internal hackathon. When Cointelegraph contacted PayPal to learn more, a spokesperson confirmed the previous reporting but did not offer additional commentary.
The potential impact of a PayPal stablecoin in payments overall and the cryptocurrency industry is hard to estimate, and while some experts see the firm’s move as an extremely positive one for the space, others believe the stablecoin would be more of the same.
Could PayPal Coin normalize crypto payments?
PayPal itself has well over 350 million active users and already lets users in the U.S. and United Kingdom buy, sell and hold Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC) while enabling payments in these crypto assets. While it’s unclear how many of PayPal’s users have paid with cryptocurrency, it’s well-known that stablecoins are mostly a tool used to trade and take advantage of opportunities in the decentralized finance space.
PayPal further pushed into the cryptocurrency industry through the launch of a stablecoin could see other traditional banking and payments companies explore blockchain technology more, according to Marwan Forzley, CEO of online payments platform Veem. Forzley told Cointelegraph that stablecoins will “likely become a part of the global payment scheme,” as moving money in a secure environment with on- and off-ramps with different applications “is a major need of small businesses.” Forzley added:
Max Galka, CEO of blockchain search engine Elementus, seemed to agree with Forzley’s assessment, noting that with globally recognized platforms such as PayPal supporting cryptocurrencies, stablecoins are immediately put in a “trusted realm for a large swath of the population.” He said it’s a “very natural fit for PayPal to develop a stablecoin,” as the move puts the firm “squarely on the map as a cryptocurrency company,” which could boost its other cryptocurrency offerings. At the same time, the trust people have in the firm could see PayPal Coin “serve a lot of additional purposes from what traditional stablecoins can offer by using that [trust] as their payment rails.”
Arbel Arif, founder and CEO of crypto marketplace Shopping.io, told Cointelegraph he applauds PayPal’s move into the crypto sectors and added that having “big players enhancing the e-commerce crypto transactions brings us a step closer to the new era of commercial trading.”
Speaking to Cointelegraph, Tim Frost, founder and CEO of wealth management platform Yield App, said that cryptocurrency payments are “finding their way into the mainstream” as a “number of companies now allow digital asset owners to pay with digital currencies using standard Visa or Mastercard.”
To Frost, whether or not PayPal launching its stablecoin would jumpstart a transition to a more cryptocurrency payment-focused world isn’t clear, although he does believe it has the potential to do so.
Not everyone agreed that PayPal Coin could be revolutionary, however. Speaking to Cointelegraph, Rytis Bieliauskas, chief technology officer of cryptocurrency payment gateway CoinGate, said he does not see how a PayPal stablecoin is “fundamentally different from what PayPal already does,” assuming it’s “centrally controlled” and has its value guaranteed by the firm. However, Bieliauskas added that it’s “interesting to see that PayPal wishes to use crypto as a positive PR move,” which, to him, suggests the public now sees cryptocurrencies as something positive rather than negative.