As you may have seen in the news recently, PayPal is making a foray into crypto and more specifically, stablecoins. Who will they partner with? Algorand appears likely. Covered: What is PayPal up to? The (Not So) Hidden Algorand Connection PayPal Stablecoin Details It is clear that PayPal is not going to erect an entire […] The post Algorand Is Working With PayPal: Here Are The Details appeared first on CryptosRus.

Algorand Is Working With PayPal: Here Are The Details

As you may have seen in the news recently, PayPal is making a foray into crypto and more specifically, stablecoins. Who will they partner with? Algorand appears likely.

Covered:

  • What is PayPal up to?
  • The (Not So) Hidden Algorand Connection

PayPal Stablecoin Details

It is clear that PayPal is not going to erect an entire blockchain and stablecoin on their own. However, the details are sparse. All we know so far, more or less, is that the PayPal Coin will be backed by the US dollar, according to reports from Engadget and others. So, not an algorithmic stablecoin, but a more classic version, backed 1:1 with the dollar like USDC or USDT.

So why wouldn’t PayPal just announce they are integrating USDC or USDT? Well, one could easily surmise this means that PayPal has more up their sleeve than merely integrating an already existing stablecoin. If that was their goal, they would’ve done just that–integrate one of the aforementioned stablecoins, or others like Paxos, as an example. So what is PayPal up to?

We can glean some information from some of their existing partnerships and relationships. Notably, Paypal led a $240 million dollar funding round for Paxos in December of 2020. Again, this begs the question: why wouldn’t Paypal just integrate Paxos then? Clearly, there’s more to the picture than meets the eye in terms of PayPals foray into crypto. Considering that building a native stablecoin requires leveraging a blockchain, the looming question is: ‘which one?’

As an example, Paxos runs on Ethereum, and USDC and USDT run on multiple chains. It is their prerogative which chain(s) to leverage. So, if PayPal is building “their own” stablecoin then that means that either they are building their own chain, or planning on using an existing chain. If they opt for the latter, which is highly likely, then such a use case would theoretically be a priceless boon for the chain(s) PayPal decides to use.

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If PayPal decides to build “from scratch” they will be prone to the same pitfalls of the Diem debacle–Facebook’s (Meta) botched crypto misadventure. With that in mind, it makes sense to posit that PayPal will build their “own” coin on an already existing chain. One interesting piece of alpha is that PayPal, in March of 2021, acquired a crypto startup called Curv. This is not the Curve exchange on Ethereum, but a security company that helps you store your crypto assets. Curv is a crypto custodian looking to onboard institutions.

The (Not So) Hidden Algorand Connection 

According to the announcement, PayPal paid between $200 million and $300 million for the acquisition. So what does this mean? Well, Algorand partnered with Curv around the same time that PayPal did, just over one year ago. Notably, Curv has major partners such as investment firm Franklin Templeton, trading platform eToro, and Genesis Trading, which is owned by CoinDesk parent firm Digital Currency Group. Put simply, Curv = PayPal.

credit: uri eden, medium

As mentioned above, Curv was bought by PayPal, so when you link to their website, it now redirects straight to PayPal.com. Other than eToro, Genesis, and Digital Currency Group, it appears Algorand is the only other crypto partner of Curv. Coinbase also invested in Curv in 2020. In essence, being that Curv is owned by PayPal, then that means Algorand is partnered with PayPal. This is not guesswork; inductively this is 100% true.

Per the announcement, “The partnership will allow institutions to build the most secure wallet functionality into applications on the Algorand open source proof of stake network, using Curv’s industry-leading multi-party computation (MPC) technology, and will enable Curv’s customers to transact and store ALGO and ALGO-based ASA tokens.”

Algorand is not the only crypto that is on the radar of Paypal. According to an article from AMBCrypto, in addition to Algorand, Solana, Polkadot, and Ethereum are also in the cards. In light of the fact they are partnered with Paxos, Ethereum is already a player in the PayPal crypto initiative. Jose Fernandez, PayPal’s senior vice president and general manager of blockchain, explained in an interview that “PayPal has yet to discover a stablecoin that is “purpose-built for payments.”

That interview was in November, and the recent news about PayPal’s foray into stablecoin’s buttress these comments. PayPal is dutifully serious about crypto, and it appears Algorand (and maybe Ethereum) are the top dogs in the race for who will support PayPal’s stablecoin. Considering the verified link between Algorand and Curv, it makes sense that Algorand could be the chosen one. We will keep you updated on the details of this evolving story.

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