PayPal is getting closer to launching its own Stablecoin

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There has been a lot of news in recent weeks about stablecoins. At the end of last year, Visa said that “stablecoins could become the medium of exchange rather than cryptocurrencies”. The announcement came after Visa launched its crypto advisory service.

Stablecoins are virtual currencies. Unlike cryptos such as Bitcoin (BTC) and Litecoin (SLD), the values ​​are indexed to traditional assets. These may include the US dollar, in the case of USD Tether (USDT) or even gold in the case of Paxos Gold backed by gold (PAXG) stablecoin.

What is PayPal and its Stablecoin plans?

PayPal Holdings Inc. (PYPL) is an American financial technology company that operates a global online payment system. The platform allows users to send and receive money and make payments online.

Started in 1998, PayPal Holdings Inc. is listed on the NASDAQ and reported sales of $ 21.45 billion in 2020.

In response to the greater adoption of cryptos, PayPal entered the crypto space in late 2020. PayPal has over 377 million users worldwide. Despite this, it would have taken 7 years to go from concept to product.

Following PayPal’s successful entry into the crypto space, it may take much less time for PayPal’s stablecoin to become a virtual reality.

Overnight, the news fell on the wires PayPal is planning to launch its own US dollar-backed PayPal coin. The report emphasizes that “evidence of PayPal’s exploration into building its own stablecoin was first discovered in the company’s iPhone app by developer Steve Moser”.

However, it is not yet clear how close PayPal is to an actual PayPal Coin launch. According to a Bloomberg report, PayPal’s senior vice president of crypto, Fernandez Da Ponte, said that a “suitable stablecoin specially designed for payments had not yet been identified “. He added that “the appropriate stablecoin should support large-scale payments and provide security ”. PayPal would also need “have clarity on regulations, regulatory frameworks and the type of license required”.

Regulation seen as an obstacle for stablecoins

By the end of last year, Fitch Ratings’ views on regulation and stablecoins had reached the news feeds. Fitch Ratings views greater regulatory certainty over the status of stablecoins and their users as a positive market. Regulatory risk, which hit the broader crypto market at the start of the year, would “dissuaded many financial institutions from engaging with stable operators”. At the end of last year we had discussed the possible negative impact of the chatter and activity of regulators in the crypto market. An appropriate global regulatory framework, which however is neither punitive nor lax, would likely support cryptos and stablecoins in particular. As Fitch Ratings points out, regulatory certainty will be essential.

This item was originally posted on FX Empire

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