Payment processor PayPal has been making inroads into the cryptocurrency market. In 2020, it has allowed people to buy and sell cryptocurrencies, but it is only available to Americans. The company is exploring options for creating a stablecoin, according to PayPal's senior vice president of crypto and digital currencies Jose Fernandez da Ponte, in a statement to Bloomberg.

In general, stablecoins are more reliable than other digital currencies, because their value is tied to a reserve currency like the dollar or rupee. A stablecoin is a cryptocurrency whose value is tied to a commodity or currency that is more stable. Bitcoin, for example, could be worth $47,000 one week and roughly $42,000 the next; whereas stablecoins will still be the same the following week. 

Jose Fernandez da Ponte spoke to Bloomberg, “I don’t think that we have seen a stablecoin that works well for payments yet.” He added, “We are exploring a stablecoin; if and when we seek to move forward, we will, of course, work closely with relevant regulators.” The source code of PayPal's iPhone application revealed the development of an in-house stablecoin by Steve Moser.

Payment processor PayPal offers a range of crypto solutions for small businesses. The company website states that there are roughly 30 million small and medium-sized businesses with PayPal accounts.

In recent months, the firm has become increasingly active in cryptocurrencies, launching new tools for holding, purchasing, and sending digital currency.  

PayPal did not provide additional details on launch timing or availability on centralized exchanges, such as Coinbase or Gemini. Many technology giants have explored launching their coins before. A stable coin called Diem is being developed by Meta Platforms Inc., formerly Facebook, and Visa Inc. began allowing a stablecoin backed by the U.S. dollar to settle transactions with the network.

Pavan A

CBW - External Analyst

INDIA