Payments giant PayPal Holdings Inc. said it is exploring launching its own stablecoin as part of an expansion of its cryptocurrency business. The company confirmed the development after someone found evidence of the move in its iPhone app.
Jose Fernandez da Ponte, Senior Vice President of Crypto and Digital Currencies at PayPal, said:
“We are exploring a stablecoin. If we seek to move forward, we will of course work closely with the relevant regulators. Stablecoins are cryptocurrencies that are backed and priced by the value of an existing currency or commodity.”
Hidden code ‘PayPal Coin’ found
Developer Steve Moser first found evidence of the company’s quest to build a stablecoin in PayPal’s app. Hidden code and pictures show a job dubbed “PayPal Coin”. The code suggests that the stablecoin will be backed by the U.S. dollar.
A PayPal spokesperson said:
“The images and code in the PayPal app are derived from a recent internal hackathon. Engineers collaborate across the company’s blockchain, crypto and digital currency divisions. Quickly explore and build new products that may never be released publicly. This means The final logo, name and function may change in the form of public release.”
PayPal has made a major cryptocurrency effort in recent months, introducing new features for buying and holding digital currencies, as well as the ability to make purchases with those currencies.
On the Unchained podcast, Fernandez da Ponte recently stated:
“The company ‘has not seen a stablecoin designed specifically for payments’. For PayPal usage, the stablecoin needs to support large-scale payments with security. Regulation, regulatory framework, and the type of licenses needed in this space It has to be clear.”
Payment giants are experimenting with cryptocurrencies
PayPal isn’t the first tech giant to try to launch its own digital currency. Meta Platforms Inc., the predecessor of Facebook, has been helping to develop a stablecoin called Diem. And Visa Inc. in recent months has allowed a dollar-backed stablecoin to settle transactions on its network.
In fact, several major payment giants such as PayPal have already changed their minds on the encryption industry.
Visa, Mastercard and PayPal do not see the rise of the crypto industry as a threat, New York-based research firm MoffettNathanson told clients in a report on Dec. 16. And will continue to invest in the crypto ecosystem.
The report highlights the growing acceptance of cryptocurrencies by legacy payment service companies and their efforts to adapt to the changing environment.
Visa sees cryptocurrencies as more than payments and sees it as a layer 2 solution. Can run on a blockchain network, as the company has done with fiat-based networks. Terry Angelos, Senior Vice President and Global Head of FinTech at Visa, said:
“Through the partnership with the crypto wallet, the company expects to see strong growth in transaction volume over the next one to two years.”
Raj Dhamodharan, Executive Vice President of Blockchain and Digital Asset Products at Mastercard, said:
“Mastercard benefits from cross-border cryptocurrency in and out traffic from cryptocurrency exchanges and wallets, and sees cryptocurrencies as an opportunity to build new products. The company also intends to be an on-ramp to the NFT market and use cryptocurrencies as the native currency for settlements added to its multi-track network.”
Meanwhile, PayPal is investing in education-related projects, hoping to reach a wider audience. The company is also working on opening up its platform to allow interaction with DeFi networks and enable users to securely transfer cryptocurrencies through digital wallets, said Edwin Aoki, the company’s technical researcher and chief technology officer for blockchain encryption and digital currencies.
Additionally, PayPal is now actively monitoring the Layer 1 and Layer 2 networks that process scaling payments, including Ethereum, Polkadot, Solana, and Algorand. Paypal is studying how these networks and their currencies fit into its plans for a scalable payments infrastructure.