Paypal confirms development of a stablecoin amid crypto push
Online payments giant PayPal has confirmed that it is ‘exploring’ the development of a stablecoin pegged to the value of the US dollar.
Stablecoins crypto currencies pegged to the price of physical assets or fiat currencies, such as gold or dollars.
Paypal’s interest in creating its own crypto currency follows recent updates to the company’s payments app to allow US and UK customers to buy, trade and transfer digital assets, including Bitcoin, Ethereum, Litecoin and Bitcoin Cash.
“We are exploring a stablecoin,” Jose Fernandez da Ponte, senior vice president of crypto and digital currencies at PayPal, told City PM. “If and when we seek to move forward, we will of course, work closely with relevant regulators.”
Evidence of the company’s exploration into building a stablecoin was first reported by Bloomberg. Developer Steve Moser reportedly hidden code and images showing work on a “PayPal Coin” within the app. The code suggested such a coin would be backed by the US dollar.
When questioned about the discovery a PayPal spokeswoman said that the images and code inside of the PayPal app stemmed from a recent internal hackathon within the company’s blockchain, crypto and digital currencies division.
While stablecoins have generated plenty of buzz in the trading world – offering the possibility of using blockchain to trade assets digitally – the world’s most popular dollar-backed currency, Tether, is at the centre of a troubling controversy.
Although Tether claims that each coin issued is backed up by $1 held by the company, the location of some $78bn in reserve funds remains uncertain.
Read more: US Senator weighs in on $73bn Tether reserves controversy