PayPal has launched a dollar-based stablecoin, making it the first major (Fintech) financial technology firm to embrace digital currencies for payments and transfers. PayPal’s shares rose by 2.66% on Monday after the announcement.
Digital currencies have been struggling over the last 12 months with financial regulations and high-profile collapses, and this launch has renewed confidence in the crypto markets.
What does it mean for the future of payments?
Firstly, this means less volatility and easier payments, which could boost PayPal’s stock and grow its profits and market share.
For the consumer, you can have PayPal coin in USD, which makes it cheaper to transfer money. One stablecoin is equivalent to 1 USD. So many international payments worldwide are made in US dollars, particularly with corresponding banks, which are usually expensive.
Individual transactions performed around the world, particularly remittances, will gain massively.
What does it mean for the crypto industry?
It Puts crypto in the spotlight and makes it more likely that digital currencies will be a success. US and EU legislative and regulatory bodies are already making headway to regulate and legitimise cryptocurrencies as a central pillar of the modern payment system.