Cryptocurrencies: the company PayPal launches a "stablecoin", at parity with the dollar

The online payment giant PayPal launches its own cryptocurrency. The latter is called PayPal USD. This digital currency is aligned with the rate of the US dollar. A risky bet, but one that could pay off big.

A pedestrian walks past the PayPal logo in an office building in Berlin, Germany, March 5, 2019. © Fabrizio Bensch / Reuters

Text by: RFI Follow

Advertising

Read more

PayPal launched on Monday, August 8, a "stablecoin" at parity with the dollar, the PayPal USD, the first so-called "stable" cryptocurrency deployed by a large company specializing in online payments, while the cryptocurrency industry is closely scrutinized by regulators. With this cryptocurrency, PayPal hopes to turn things around while the company is struggling. On the stock market, its stock has lost 35% of its value in one year.

This category of digital currencies is intended to be more stable than traditional cryptocurrencies, since their value follows the course of an established currency, such as the dollar or the euro. PayPal users will be able to buy PayPal USD, transfer it to other digital wallets, convert it into other cryptocurrencies, use it to pay online or to pay money to relatives, the California-based group said in a statement.

« A way to maintain leadership »

According to cryptocurrency specialist Jean-François Faure, the game is worth the candle for the American giant of online payment. "It's a way to maintain leadership. Cryptos are essential. The proof is that the states are getting on with it. We see Europe developing its digital euro. Strategically, they have no choice but to do it. Otherwise, they will be overtaken by the competition. I was going to say in 10 years, but not even. Rather in 2-3 years. " he analyzed.

But stablecoins are not without risk. The prices of some of them faltered when the prices of cryptocurrencies plunged in the spring. In 2022, the cryptocurrency Terra USD, a mainstay of the market, collapsed. The fall cost investors US$40 billion.

For now, stablecoins are mainly used to facilitate the exchange of cryptocurrencies between them by investors, without having to go through a bank, making them an essential cog in the crypto industry. They also give users access to a dollar-pegged product without having a U.S. bank account.

While authorities are looking for ways to better regulate cryptoassets and several major platforms have gone bankrupt, Sam Altman, the boss of OpenAI (ChatGPT) last month launched a new cryptocurrency, Worldcoin, with a system of identity verification from the human iris.

(With AFP)

LISTEN ALSOTODAY the economy – Zimbabwe launches a cryptocurrency pledged on gold

NewsletterReceive all the international news directly in your mailbox

I subscribe

Follow all the international news by downloading the RFI application

Share:

Read on on the same topics:

• Internet
• Finance
• Economy
• Cryptocurrencies