Digital Assets
Paypal Is Creating a Native Cryptocurrency — a Stablecoin Called Paypal Coin
Securities.io is committed to rigorous editorial standards. We may receive compensation when you click on links to products we review. Please view our affiliate disclosure. Trading involves risk which may result in the loss of capital.
PayPal announced major news that could have a great impact on the cryptocurrency industry. The payments giant just revealed that it is exploring its personal stablecoin and that it is likely to build one, at least for exploratory purposes. Even though the company has no concrete plans for practical implementation, this might easily change if PayPal decides that a native digital currency would benefit its business.
PayPal announces PayPal Coin
PayPal has spent more than a decade of the crypto industry’s existence simply ignoring it. It did not and does not provide payment services to crypto exchanges, and it was always fairly difficult to find a way to use it for direct crypto purchases. Things changed in late 2020 when the company announced support for digital coins on its platform.
So far, only the US and the UK can access digital coins on PayPal, but that still represents a great achievement. The company is now ready to take the next step and start considering a native digital currency — PayPal Coin.
The announcement was ready to stop the crypto industry’s crash and push most coins towards trading in the green on a daily basis, even though PayPal made sure not to cause too much hype about the new development. The company simply stated that it is exploring the development of a stablecoin that would possibly be pegged to the US dollar.
PayPal’s Senior VP of crypto and digital currencies, Jose Fernandez da Ponte, also pointed out that the endeavor is strictly for exploration purposes. Even so, he added that PayPal is quite serious about it. It doesn’t have concrete plans for practical implementation of the coin, or even a roadmap for the project. But, if the cryptocurrency gets approved, it will meet all necessary regulatory standards.
It makes sense for PayPal to create a stablecoin
While the new development may have come out of the blue, it makes sense for PayPal to pursue the creation of a native stablecoin, as it could bring numerous advantages. First, it allows the company to avoid regulatory pressure that typically follows regular cryptocurrencies, and it provides peace of mind for customers who wish to own cryptocurrencies and not lose money to volatility.
The so-called PayPal Coin was discovered only recently by software developer Steve Moser. Previously, Moser also revealed that the PayPal App had references to a cryptocurrency called NEO in its code. NEO is a crypto project that has seen great popularity in China for a time, and it even earned the nickname “Chinese Ethereum.” Previously considered a potential “Ethereum Killer,” NEO has since fallen on the list of largest coins.
PayPal’s decision to enter the crypto sector is seen by many in the crypto industry as a positive move, as it will continue to bring attention to the cryptocurrency sector. Chances are that PayPal’s stablecoin will be centralized, and as such, not a “real cryptocurrency.” As such, it might not be too different from what Facebook intended when it first announced its native crypto project, Libra.
In fact, PayPal used to be one of the founding members of the Libra Association, and while the initiative ultimately failed, it did provide PayPal with some worthy insights which might allow it to avoid falling into the same pitfalls.
