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Paypal is working on its own stablecoin

Paypal is working on its own stablecoin

January 11, 2022

Paypal confirmed that it is working on its own stablecoin. A developer discovered a reference to a so-called Paypal Coin in the code.

Developer Steve Moser discovered a reference to the Paypal Coin in the source code of the iPhone app. Paypal confirmed to Bloomberg that they are developing their own stablecoin. "Obviously, if we go through with it effectively, we will work closely with regulators," said Jose Fernandez da Ponte, senior vice president of the crypto and digital currencies branch.

The Paypal Coin is said to be backed by the US dollar. Other well-known stablecoins are currently Tether (USDT) and the USD Coin (USDC), where 1 USDT or 1 USDC is always approximately equal to 1 US dollar. Tether is currently the leading stablecoin with a market capitalization of $80 billion.

Stablecoins are interesting because you have the advantages of crypto without running the risk of price losses. For example, they are often used to quickly transfer money internationally to startups that are doing a capital round.

Paypal entered the cryptocurrency market in 2020 with the launch of its own service that allows customers to buy, store and sell cryptocurrencies. The service is not yet live in all countries, but it is already a success in the US and the UK.

Weak year on the stock market

Paypal started the year 2021 at a price of about USD 230 and was able to make a high against USD 310 in July. After that, sentiment turned sharply and the stock started a steep decline. In December, it hit a low around $180.

However, Paypal is a money machine like most payment processors. They all benefit from the growth in the number of digital payments. A well-known example of such a stock market favorite is Mastercard. However, Paypal is somewhat more volatile because the company is more agile and therefore explores new markets more quickly, such as with its own crypto service.

Analysts' opinions

Analysts are positive for Paypal and almost all of them give buy advice. Paypal closed at $182.95 yesterday and UBS sees some 43% upside potential for the stock. UBS has a price target of $263. Bank of America Securities and Morgan Stanley give a price target of $265. RBC Capital and Mizuho Securities are slightly less bullish with price targets of $230 and $225 respectively. BNP Paribas downgraded Paypal yesterday from outperform to hold with a $200 price target.


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