AUS
NZ
UK
CA
USA
IND
Highlights
- Earlier this month, PayPal had announced that it’s exploring a stablecoin of its own, which could be named PayPal Coin.
- PayPal’s stablecoin could well be a gamechanger, especially after Facebook gave up on its failed stablecoin attempt with Diem.
- The move could fuel the crypto payments industry and could very well lay the foundation for a safe and reliable alternative to traditional currencies.
From the very beginning, Stablecoins have had been a debatable topic. Riled with controversies and talks of regulations, the stablecoins have often been seen as ‘unsafe’ and are open to market manipulations.
Stablecoins are traditionally digital currencies whose value is pegged to a reserved asset like US Dollar, gold, etc., to ensure their price remains stable despite market bloodbath. Stablecoins, are traditionally digital currencies, whose value is pegged to a reserved asset like US Dollar, gold etc., to ensure their price remains stable. They differ from other cryptos as they provide more flexibility in maintaining a more or less fixed value than cryptos.
Also read: Wedding to fashion shows: Quirky things happening on crypto metaverse
But PayPal announcement of exploring a stablecoin with PayPal Coin, could change the entire market dynamics. PayPal’s entry into the stablecoin industry could well inject massive confidence into the investors and its impact, according to experts, could be immense and have a positive influence in the space.
PayPal Coin’s possibilities
PayPal is not new to the crypto space as it already has over 350 million active users worldwide. These users have used PayPal for crypto transactions in leading digital currencies, such as Bitcoin, Ethereum, Litecoin etc.
With traditional finance companies increasingly moving into the cryptocurrency sector, PayPal’s reach and PayPal Coin’s impact can be immense. Established financial companies’ reach is limited, and they don’t deal with volatile assets such as cryptos. So, PayPal’s stablecoin could well be a gamechanger, especially after Facebook’s attempt to launch Diem failed. The move could fuel the crypto payments industry and could very well lay the foundation for a safe and reliable alternative to traditional currencies.
Also read: Are Bitcoin backers looking for jobs at McDonald’s? Memes roast BTC
From the eyes of regulators
Jose Fernandez da Ponte, senior vice president of crypto and digital currencies of PayPal, highlighted that the company intends to move forward with the stablecoin and will be working in coordination with the regulators. PayPal would do well if it does not repeat the mistakes that its predecessors, such as Facebook, have made in their pursuit of stablecoin launch.
The regulators have often come down hard on stablecoins. Securities and Exchange Commission (SEC) chair Gary Gensler has voiced his concern about stablecoins and regulations. Many industry leaders like US billionaire entrepreneur Mark Cuban felt that whenever crypto regulations kick in, stablecoins would be the first to be regulated.
Stablecoins such as Tether, DAI, Binance USD, all have been trading in the market and are popular ones within the domain. But they are also riddled with issues related to failure to safeguard reserve assets, lack of clarity regarding the rights of stablecoin holders, and others.
Conclusion
Though at the moment, very little is known about PayPal Coin, experts believe that PayPal’s step is an obvious one on its part. If it can overcome the regulatory challenges, PayPal could well set the template for other payment firms planning to venture into the field.
For now, the news has certainly raised market expectations and participants are waiting to witness the launch.
