People familiar with the matter: Payment giant PayPal is exploring the possibility of launching a stable coin

Talks with Ava Labs, the Avalanche blockchain development team, and others.

Summary:
PayPal is exploring the launch of a stablecoin, The Block has learned.

PayPal has been in multiple rounds of communication with a number of stablecoin protocol developers in the industry, four sources with knowledge of the situation said.

PayPal announced its move into crypto services last fall.

PayPal is understood to be exploring the launch of a stablecoin.

PayPal has been in multiple rounds of communication with some of the industry’s stablecoin protocol developers, four sources familiar with the situation said, suggesting the payments giant may be leaning toward partnering with third-party companies.

People familiar with the matter: Payment giant PayPal is exploring the possibility of launching a stable coin

It’s not clear what other protocols are involved, according to the people familiar with the situation, which include Ava Labs, the team behind the Avalanche blockchain.

A PayPal spokesperson told The Block, “PayPal continues to explore the potential of digital currency, digital financial services infrastructure, and how we can help enhance digital commerce as a trusted partner in the space.”

The spokesperson said, “As a global company working with global regulators and industry partners to build the next generation of financial systems, the company regularly communicates about the technology to achieve these goals. However, rumors and speculation do not predict the company’s future plans.”

If PayPal does move forward with such a project, it would represent a major upgrade to its work in the crypto space. Stablecoins are digital assets that represent fiat or government-backed currencies and use blockchain networks as a payment channel. According to data collected by The Block, there are currently more than $80 billion worth of stablecoins circulating in the market.

A source told The Block, “It seems more likely that they’ll do something with an existing stablecoin partner rather than building it themselves because I think that will get something to market faster, and I think that’s their main concern.”

Rumors about PayPal’s desire to launch a stablecoin have been circulating for a long time. In fact, sources say the move is the crypto industry’s best-kept secret.

Last fall, PayPal announced that it would implement crypto buying and selling capabilities on its platform through a partnership with startup Paxos. Since then, PayPal has begun to expand its crypto offerings.

On March 8, PayPal announced its agreement to Curv, a crypto security company and multi-party computing (MPC) startup, an acquisition that has now been completed by PayPal.

Another tech giant, Facebook-backed stablecoin project Diem, has also made moves recently. Previously known as Libra, the project has been renamed Diem and overhauled following strong opposition from regulators, and is in talks with Swiss financial regulators to obtain a payments license. As CNBC reported in April, a source familiar with the matter said the Diem association aims to launch a single-currency stablecoin pilot pegged to the U.S. dollar in 2021.

In a recent meeting, Diem Chief Economist Christian Catalini explained that the Diem stablecoin is intended to be a temporary stand-in for the CBDC. According to Catalini, the main goal of the Diem association is to create a cross-border payment structure and build a trusted market around it. Ultimately, the goal appears to be to replace Diem’s own stablecoin with CBDCs in the system, and Diem sees the partnership with central banks as a future extension of its network, as a transitional measure until the launch of CBDCs. Until these CBDCs are launched, the Diem stablecoin will be the means of payment. Instead of a token pegged to a basket of assets, it will be a fiat 1:1 backed stable with “high quality liquid assets” to insulate it from any major market activity, such as interest rate shocks or bank defaults. The new plan appears to be an attempt to allay previous G7 concerns about stablecoins and extreme market conditions.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/people-familiar-with-the-matter-payment-giant-paypal-is-exploring-the-possibility-of-launching-a-stable-coin/
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