PayPal to introduce its own crypto-currency soon

PayPal has long been interested in crypto-currencies and a way for its group to position itself in this growing market. In the face of persistent rumours about the launch of a proprietary digital currency, the group has finally confirmed this strategy. His decision to leave Facebook's Libra project makes sense as a PayPal Stablecoin is in the works.

FACTS

• Jose Fernandez da Ponte, senior vice president of crypto and digital currencies at PayPal, has officially stated that his company is currently working on the launch of a secure Stablecoin, with a value backed by the US Dollar.

• The announcement follows numerous rumours and the discovery of lines of code in PayPal's iOS app that call for a still mysterious "PayPal Coin".

• PayPal has not revealed anything about the contours of its crypto-currency (its name and logo are not definitive). The group simply agreed to confirm the progress of its work with regulators on the issue.

ISSUES

• A step in building a super-app model: PayPal has been working throughout 2021 to diversify its business. This appetite for many new services led to the presentation of a super-app last September. Just before that, the group concretised its ambition to democratise crypto-currencies with the launch of a new dedicated trading service.

• Co-create: In addition to discussions with regulators, PayPal has relied on an internal hackathon to develop its project, as well as on collaborative work with companies specialising in blockchain such as Avalanche (AVAX).

• Being a pioneer of innovation: Private players in the US know they have a card to play to advance the subject of cryptocurrencies at both the institutional and economic levels. Paypal unveils with this new project these important ambitions in payment and beyond.

MARKET PERSPECTIVE

• As a reminder, Stablecoins are crypto-currencies backed by the value of an existing currency or commodity. Amongst the US web giants, Facebook is leading the way on the issue of launching private Stablecoin. But the rollout of its pioneering project has been marked by many twists and turns.

• PayPal was also part of the Libra adventure at the start but finally chose to leave the project in 2019. The reason for this was the regulators' fears about Facebook and its propensity to respect the confidentiality of its customers' data. PayPal is positioning itself later on this market. However, the group has more experience in the area of payments and benefits from the major regulatory advances in these areas over the last two years.