Paypal is looking to develop a dollar-backed stablecoin as the payments giant ramps up its efforts in the cryptocurrency space.
The company confirmed the news to Bloomberg last Friday after developer Steve Moser discovered the evidence inside the PayPal app on iPhone. The Block was the first to report in May 2021 that talks were underway.
Moser told Bloomberg that the project is called “PayPal Coin” based on the code and images.
A Paypal spokeswoman told Bloomberg that the initiative was the result of a company hackathon within the blockchain, crypto, and cryptocurrency division.
A stablecoin is a type of cryptocurrency that is backed by an external asset, such as the US dollar. Among the well-known stablecoins are those issued by Tether, Circle and Binance, whose combined valuation rose to just $164 billion from $11 billion two years ago, according to CoinMarketCap data.
PayPal joins the ranks of Meta Platforms, formerly known as Facebook, in developing its stablecoin. Facebook’s stalled project is called Diem, renamed from Libra, a blockchain-based payment system that has since faced a number of roadblocks.
Since stablecoins have ballooned and become an integral part of the functioning of the crypto markets, the administration of President Joe Biden has been working with top economic advisors and top regulators to propose rules to regulate them. In September 2021, Securities and Exchange Commission Chairman Gary Gensler compared stablecoins to poker chips in a casino.