PayPal’s (PYPL.O) stablecoin is expected to thrive where Facebook’s failed, owing to the payment giant’s clout in Washington and officials’ improved knowledge of the challenges over the previous three years.
PayPal announced this month the introduction of PayPal USD, a crypto token tied to the US dollar, becoming the second large global firm to do so after Facebook, now Meta Platforms META.O, debuted Libra in June 2019.
The plan, which comes as PayPal prepares to transition to a new CEO announced last week, appears hazardous after Facebook’s stablecoin was crushed by political resistance and as authorities clamp down on the crypto sector following many meltdowns.
However, former officials, executives, and experts believe PayPal is in a better position than Facebook. Stablecoins, crypto currencies often tethered to a fiat currency, are more acquainted to policymakers than they were in 2019. A attempt to implement federal stablecoin laws has also helped legitimize them in the eyes of politicians.
“The world has changed dramatically since Facebook’s Libra project. There was no familiarity with stablecoins whatsoever,” said Christopher Giancarlo, former chair of the U.S. Commodity Futures Trading Commission.
“Since then the administration, Congress and the Federal Reserve have had time to get their minds around stablecoins and stablecoin regulation and there has been very extensive public relations by the industry, including a lot of lobbying.”
In contrast to Facebook, the social media behemoth that has been under constant investigation for privacy violations and Russian political meddling, PayPal is a well-established financial operation in Washington. According to OpenSecrets, it spent $1.13 million on federal lobbying last year and has been pushing on cryptocurrencies for several years.
