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from the stable-coin-might-exit-the-barn dept.
PayPal confirms it's exploring the launch of its own stablecoin:
PayPal has been expanding its cryptocurrency business since it opened trading to all users in 2020. It allowed US customers to check out with cryptocurrency and increased its crypto buy limit over the past year. In the future, it might also offer a stablecoin of its own. Jose Fernandez da Ponte, SVP of crypto and digital currencies at PayPal, has confirmed to Bloomberg that the online payment provider is "exploring a stablecoin." He also said that the company will work closely with relevant regulators "if and when [it] seek[s] to move forward."
A developer named Steve Moser found hidden code and images for a "PayPal Coin" in the company's app and shared them with Bloomberg. Based on what he discovered, the PayPal Coin will be backed by the US dollar.
(Score: 4, Insightful) by Anonymous Coward on Monday January 10 2022, @12:00AM (3 children)
IIRC, way way back the government had an opportunity to decide if PayPal and other online payment services should be regulated like banks and they decided not to do it.
I'm thinking this means that PayPal's "stable" coin won't be required to have the kinds of reserves that banks do. That means that just like in days of old, a "run" on it could bankrupt the coin, or if they're really stupid and don't hold enough reserves and compartmentalize it, it could bankrupt PayPal.
This is a recurring theme in the libertarian and crypto world--the drive to eliminate the cruft accumulated by government experience in the field leads to a re-creation of the cruft, but in a less robust way. This was played to comedic affect on The Simpsons, and it was funny because it's true.
(Score: 0) by Anonymous Coward on Monday January 10 2022, @02:41AM (1 child)
As I've posted here before, I don't think bankers (as a group) are all that smart. Thus the need for regulation to prevent the bankers from engaging in risky behavior with their customers money (deposits), and other sorts of bad behavior. The temptation to engage in this risky behavior is clear--big bonuses when a gamble works out. And whining "too big to fail" when a deal goes south.
While PayPal and other payment processors aren't regulated like a bank, I wonder if they are any smarter (as a group) than bankers...?
(Score: 3, Insightful) by mhajicek on Monday January 10 2022, @07:46AM
Smart or not isn't the issue. They'll happily risk other people's money and wellbeing so long as they get theirs. This often means individuals will make decisions that are not in their company's best interest.
The spacelike surfaces of time foliations can have a cusp at the surface of discontinuity. - P. Hajicek
(Score: 2) by JoeMerchant on Monday January 10 2022, @01:42PM
Bankruptcy is a big win, for the debtors.
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