PayPal plans to develop a dollar-backed stablecoin as the payments giant boosts up its efforts in cryptocurrency space.
The company confirmed the news to Bloomberg on Friday after a developer, Steve Moser, discovered the evidence in PayPal’s iPhone app. 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 & pictures.
A spokesperson of PayPal told Bloomberg that the initiative was a result of a company hackathon within its blockchain, cryptocurrency & digital currencies division.
A stablecoin is a type of cryptocurrency backed by an external asset, such as the US dollar. Popular stablecoins include those issued by Tether, Circle & Binance, whose combined valuation soared to $164 billion from just $11 billion 2 years ago, according to data by CoinMarketCap.
PayPal joins the ranks of Meta Platforms, formerly Facebook, by developing its own stablecoin. Facebook’s stalled project is called Diem, renamed from Libra, a blockchain-based payment system that has since encountered a number of road blocks.
As stablecoins have grown in size and become an integral part of cryptocurrency markets, President Joe Biden’s administration has worked with leading economic advisers a& senior regulators to come up with rules to regulate them. Gary Gensler, chairman of the Securities & Exchange Commission, compared stablecoins to poker chips in a casino in September 2021.