payment giant paypal said on Monday that it has launched the US dollar stablecoinbecame the first major fintech firm to adopt digital currencies For payments and transfers.
While stablecoins – crypto Tokens whose monetary value is tied to a stable asset to protect against wild volatility – have existed for many years now, they have yet to successfully penetrate the mainstream consumer payments ecosystem.
PayPal’s announcement, which sent its shares up 2.5 percent in afternoon trading, reflects a show of confidence in the troubled industry, which has been battling regulatory hurdles for the past 12 months, made worse by a series of high-profile collapses. had become worse.
Prior attempts by major mainstream companies to launch stablecoins have faced strong opposition from financial regulators and policymakers. meta Then Facebook There are plans to launch a stablecoin in 2019, Libra Thwarted after regulators raised concerns that it could harm global financial stability.
A range of major economies, from the UK to the European Union, have put in place regulations governing stablecoins. The EU policies will come into force in June 2024.
Last month, the US House Financial Services Committee also introduced a bill to establish a federal regulatory framework for stablecoins, which will focus on rules for the registration and approval process for stablecoin issuers.
PayPal’s stablecoin, called PayPal USD, is backed by US dollar deposits and short-term US Treasuries, and will be issued by the Paxos Trust. It will be gradually available to PayPal customers in the United States.
Argus Research Corp analyst Stephen Biggar said PayPal’s brand name makes the stablecoin launch significant but the company has been involved with crypto before so it’s no surprise.
Visa It also said that in 2021 it would allow the use of cryptocurrencies to settle transactions on its payments network.