Since its launch in 1998, PayPal managed to generate almost 392 million active users. Given that it already supports 26 currencies, the American multinational fintech is about to reach the next level by creating its own stablecoin!
Namely, after the developer, Steve Moser, discovered a hidden code called PayPal Coin on PayPal’s iPhone app, the company’s senior vice president of crypto and digital currencies, Jose Fernandez da Ponte, confirmed that they are exploring the idea of creating a stablecoin.
Besides cryptocurrencies, such as Bitcoin, Bitcoin Cash, Litecoin, and Ethereum, PayPal’s app revealed that the company could also start supporting the Neo cryptocurrency.
Furthermore, while most stablecoins are backed by gold, PayPal Coin could be supported by the US dollar, making it much easier for PayPal users to adopt.
What are stablecoins? In short, a stablecoin is a type of cryptocurrency that’s somewhat different from Bitcoin since it’s backed by a reserve asset (in most cases — gold). It’s also less erratic and more stable, hence the name.
For example, Bitcoin’s price is currently worth $40,847. However, it could be worth much less in the next few days due to its volatility. Meanwhile, if stablecoin is worth one gram of gold, it won’t lose its value over such a short period.
Stablecoins can also be sorted into three categories:
- Fiat-collateralized stablecoins (backed by sovereign currency)
- Crypto-collateralized stablecoins (supported by other cryptocurrencies)
- Non-collateralized or algorithmic stablecoins (no associated collateral)
When will PayPal introduce its stablecoin to the public (or if at all) is yet to be seen.
