PayPal has confirmed that the company is looking at launching its own USD-backed stablecoin, possibly called “PayPal Coin.”
In a statement to Bloomberg News, Jose Fernandez da Ponte, PayPal’s senior vice president of crypto and digital currencies, said that the payments giant was exploring stablecoins with regulation in mind.
“We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators.”
The possibility of PayPal launching its own coin was first discovered by iOS developer Steve Moser who found elements of a “PayPal Coin” built into the company’s app source code.
A spokesperson for PayPal said that the code in the app came from a recent “hackathon,” or an event where engineers team up to quickly build new products that may never see a public release — within the firm’s blockchain, crypto and digital currencies division. According to the spokesperson, this means the ultimate logo, name and features could end up changing.
In a November interview on the Unchained podcast, Fernandez da Ponte initially hinted on the firm creating a stablecoin, but said regulatory clarity was still an issue.
“The technology getting ready and especially in terms of security, throughput and scalability is one aspect. The other aspect is that there is clarity on the regulation… There would have to be clarity on the regulation, the regulatory frameworks, and the type of licenses that are needed in this space,” he said.
PayPal isn’t the first US tech giant to be looking at launching their own stablecoin. Facebook – now called Meta – launched the pilot program of its Novi wallet which utilizes Pax dollars (USDP). However, Facebook Financial (F2) chief David Marcus said that once the unicorn manages to get the green light from regulators, it’ll be aiming to use its own stablecoin called Diem.
“I do want to be clear that our support for Diem hasn’t changed and we intend to launch Novi with Diem once it receives regulatory approval and goes live. We care about interoperability and we want to do it right.”
Diem aims to be pegged to a basket of fiat currencies rather than just the USD, and has faced harsh criticism from US lawmakers. Senators Brian Schatz, Elizabeth Warren, Richard Blumenthal, Sherrod Brown, and Tina Smith, all wrote to Facebook CEO Mark Zuckerberg urging him to shut down the project.
According to the senators,
“Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient. We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”