- PayPal reportedly confirms plans to explore the launch of a stablecoin.
- Evidence of the company’s exploration into building a stablecoin was first discovered in PayPal’s app by developer Steve Moser.
- Work on what has been dubbed a “PayPal Coin” is visible through hidden code and images.
According to the company, PayPal Holdings Inc. is considering launching its own stablecoin as part of its cryptocurrency push, which confirmed the news after evidence of the move was found in its iPhone app.
Stablecoins are cryptocurrencies backed by the value of an existing currency or commodity and are priced accordingly. For example, tether (USDT) and USDC, the two largest stablecoins by market capitalization, are designed to always be worth $1. They help navigate blockchain-based platforms that eschew traditional currencies for regulatory or other reasons; they maintain their value so people can shift their portfolios.
Jose Fernandez da Ponte, senior vice president of crypto and digital currencies at PayPal, said in a statement to Bloomberg News that,
“We are exploring a stablecoin; if and when we seek to move forward, we will, of course, work closely with relevant regulators.”
Evidence of the company’s exploration into building a stablecoin was first discovered in PayPal’s app by developer Steve Moser and shared with Bloomberg. Work on what has been dubbed a “PayPal Coin” is visible through hidden code and images. According to the code, such a coin would be backed by the United States dollar.
A PayPal spokeswoman said the images and code in the PayPal app came from the company’s blockchain, crypto, and digital currencies division’s recent internal hackathon — an event in which engineers collaborate to quickly explore and build new products that they may never see a public release. That means the final logo, name, and features may change when the product is released to the public.
PayPal has engaged in a significant cryptocurrency effort in recent months, launching new features to buy and hold digital coins and the ability to pay for purchases using the monies. On the Unchained podcast, Fernandez da Ponte said that,
“recently that the company has not yet seen a stablecoin out there that is purpose-built for payments. A stablecoin would need to support payments at scale and have security for PayPal’s use. In addition, there would have to be clarity on the regulation, the regulatory frameworks, and the type of licenses that are needed in this space.”
PayPal has already dipped its toes into the cryptocurrency waters, unusual for a major corporation. It began allowing users to buy, hold, and sell digital assets such as Bitcoin and Ethereum in late 2020. It then applied this concept to Venmo, creating a “checkout with crypto” feature for paying merchants.
As part of its crypto strategy, partnered with Paxos, a fintech startup that issues the Pax Dollar (USDP) stablecoin, USDP’s market cap stands at just over $1.05 billion, up from around $500,000 last year, according to CoinGecko. By contrast, USDT has a market cap of $79.2 billion, up from $23.5 billion a year ago. For its part, PayPal has a market cap of $220 billion. So its own stablecoin could be valuable indeed.
PayPal isn’t the first tech giant to consider launching its own cryptocurrency. Diem is a stablecoin developed by Meta Platforms Inc., formerly Facebook, and Visa Inc. recently allowed a stablecoin backed by the US dollar to settle a transaction with the network.