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- PayPal plans to keep Facebook out of the crypto empire.
- PayPal is already attracting crypto-savvy users.
- Crypto empire.
- PayPal supports bitcoin as a payment method.
- Closed system
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PayPal wants to stir up the crypto market and announce its stablecoin. The payment service provider could have more success than Facebook.
It is an ambitious project currently being worked on in San Jose, California. In addition, PayPal is working on its Stablecoin – a cryptocurrency, the one to one with a fiat currency, such as Euros or dollars deposited. This equivalent value is intended to ensure that the price remains stable and that the coin is not subject to such strong fluctuations as Bitcoin and other cyber currencies. Stablecoins are primarily used as an exchange currency, for example, to invest in other cryptocurrencies. If you are interested in bitcoin trading, visit https://ekronasoftware.com/ to acquire an utter guide to crypto trading.
PayPal plans to keep Facebook out of the crypto empire.
For an extended period, there have been doubts that the US payment service provider is planning to launch its stablecoin. However, a leaked source code analysis of the PayPal app had made the project public. Now a manager of the US giant who specializes in cryptocurrencies has confirmed these plans. However, it is unclear exactly when the PayPal coin will be issued. The Paypal coin logo was discovered by a developer named “steve Moser” inside the PayPal app. There are also some indications that US Dollar would back up this coin.
PayPal isn’t the first company to work on its stablecoin. In 2019, Facebook (now Meta) announced its plans to work on its stablecoin: Libra. Today the coin is called Diem – and is still waiting for its market debut. Numerous founding partners – including PayPal itself – have since left. But Facebook’s failure so far doesn’t have to bode poorly for PayPal. Because the conditions of the payment service provider are better, PayPal’s crypto ambitions could ultimately outclass Facebook’s stablecoin Diem.
Beyond 400 million people use the payment service provider’s offers worldwide. As a result, you can send money back and forth quickly and in a matter of seconds – sometimes even free of charge and across national borders. “PayPal enjoys great customer acceptance. And the need for a digital currency that people can use globally has long been there,” says Oliver Geisler, Senior Partner at the consulting firm Capco and who specializes in digital currencies. “That should have a supportive effect on their crypto plans.”
PayPal is already attracting crypto-savvy users.
PayPal was involved in the crypto market long before its stablecoin release. The payment service provider has long been involved in the crypto market. For the past few months, PayPal has allowed users from several countries, including the US and UK, to trade cryptocurrencies. In addition, with the “Checkout with Crypto” function, customers can pay with Bitcoin when shopping online. A well-developed payment infrastructure and crypto-savvy users: This means that the starting conditions for Paypal are better than they were for Facebook at the time.
“Technically, it would not be difficult for PayPal to launch the stablecoin,” says Geisler. The problem lies elsewhere: with the regulators. When Facebook announced its crypto plans, there was harsh criticism from politicians and financial regulators. The money monopoly is a task of the states and not private companies. The unanimous echo was that Facebook should not become a central bank. Crypto consultant Geiseler sees Facebook’s handling of this as the main reason for Diem’s failure: “Facebook tried to implement its Libra project by bypassing the regulators.”
Not so with PayPal: When a PayPal manager confirmed the stablecoin plans at the beginning of the week, he immediately added that the company would cooperate with the regulatory authorities. The payment service provider appears much tamer and has a better image than Meta. Nevertheless, the company is repeatedly criticized for data protection violations, among other things.
PayPal also wants to deposit its coin exclusively with dollars – an aspect that could go down well with US regulators. Facebook originally planned to use a mixed basket of currencies, including dollars, pounds, yen, and euros. However, the tech group has deviated from this and is now planning to focus on the US currency.
PayPal’s ambitions underline: Tech companies have long been vying for the sovereignty of interpretation in the crypto realm. Whether they can score there with their market power is still open.
PayPal supports bitcoin as a payment method.
American PayPal users can now pay with bitcoin at 29 million affiliated merchants, PayPal said in a press release. Users with bitcoin on their PayPal account can choose to pay in bitcoin from their credit during the checkout process, after which the merchant will receive payment in a regular currency of their choice.
In a press release on Tuesday, PayPal announced that American users of the payment service can now pay with bitcoin at 29 million affiliated merchants. In addition, users who have cryptocurrencies such as bitcoin in their PayPal account can choose to pay with it during the checkout process.
At the time of checkout, the amount in bitcoin is sold at the current exchange rate, and the merchant receives payment in their account in a regular currency of your choice. PayPal says it does not charge extra transaction costs for bitcoin payments.
Currently, the service is only accessible to US users of the payment service.
A PayPal account is required to pay via PayPal with bitcoin. For several months now, PayPal users have bought, stored, or sold bitcoin via the platform. They can now also pay at affiliated retailers from the credits in their accounts.
For the time being, it is not possible to pay a merchant who is connected to PayPal from a standard bitcoin wallet. It is also impossible to deposit bitcoin from your bitcoin wallet into a PayPal account, nor to withdraw bitcoin from a PayPal account to your (own) bitcoin wallet.
Therefore, it is a completely closed and ‘custodial’ system, in which only PayPal has a genuine bitcoin wallet and, as a central intermediary, manages on behalf of users. Users do not have a bitcoin wallet, no bitcoin addresses, and no private keys.
The Bitcoin network is therefore hardly used. This mainly comes into play when PayPal buys or sells bitcoins on behalf of a user. Bitcoin via PayPal mainly means exposure to the price, but not to the decentralized network. It thus ignores many of the innovations and benefits of decentralization.
Given PayPal’s business model, this is perhaps not surprising because PayPal treats every currency this way. However, it provides only limited benefits for users.
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