PayPal's Stablecoin: A Game-Changer for Crypto and Finance?

On August 7, 2023, PayPal announced it was launching a stablecoin. This is the first time that a traditional financial institution has entered the stablecoin sector, and one of the first times a traditional financial institution has made a major commitment to using decentralized blockchain technology for a core financial process.To date, a lot of the activity in the crypto world has simply revolved around itself and has had little connection to the real economy. Stablecoins have grown popular as a means of trading crypto, but their use outside of crypto has been quite limited. What does PayPal hope to achieve with its stablecoin, and how will it be used? Why does PayPal believe crypto technology can bring significant benefits to a traditional financial service, payments?PayPal’s action also triggered immediate and diverse reactions from members of Congress—with some saying this showed the innovative potential of the technology, and others critical because of the lack of a federal regulatory framework for stablecoins. How will PayPal’s stablecoin be regulated, and how will its action affect the debate about regulation? How is PayPal’s action similar to or different from Meta’s (then Facebook) attempt to launch Libra?

Jose Fernandez de la Ponte, PayPal’s senior vice president and general manager for blockchain, crypto and digital currencies, discussed these issues and took questions. The event was held on Tuesday, September 19, 2023 and was moderated by Tim Massad, Research Fellow and Director, Digital Assets Policy Project at the Mossavar-Rahmani Center for Business & Government.