PayPal Holdings Inc (NASDAQ: PYPL) plans to launch a PayPal coin supported by the U.S dollar. However, the company didn’t reveal when customers should expect the rollout. Moreover, the company needs licenses. It also required regulations and guidelines for stablecoin. The stablecoin should support numerous payments and be secure.
Many small businesses have been reluctant to venture into cryptocurrency as it is highly volatile. However, stablecoin could present a solution. Stablecoin value is linked to traditional assets such as gold or the U.S dollar. If the model works, similar digital currencies could follow suit.
Banks face stiff competition from fintech
Meanwhile, Jamie Dimon, the CEO of JPMorgan Chase and Co. (NYSE: JPM), has revealed that banks costs more than fintech in a 66-page document to his shareholders. Furthermore, the company has lost billions of dollars to banking regulations that make banks safe but slower.
There has been competition between prominent banks and their tech counterparts. Moreover, there is increased lobbying by groups that represent them, showing that their rivalry will be intense.
Banks face competition from PayPal’s Venmo. Venmo has seen a surge in popularity among users and overtaken significant banks like Wells Fargo. If its popularity continues to increase at the same rate or more, it could damage the banks.
For this reason, banks are telling consumers that non-bank companies are avoiding regulations this getting away with a lot. Banks are also trying to integrate cryptocurrency into their operations as this could give them a head start when they become more mainstream.
In addition, banks have adjusted their business practices as technology increases to keep up with their competition. For example, they have joined trade groups such as the Financial Technology Association. They have also joined lobbying groups that deal with the concerns of the Treasury Department, like stablecoin.
Sawyer and Company Inc has also increased its PayPal holding by 450%. It bought the shares at an average price of $214.83. This purchase has impacted its portfolio by 0.05%.
According to Zacks Analysts, PayPal is one of the biggest fintech companies. However, the last six months have seen the company shares decrease by 36%. Despite this, analysts expect PayPal’s earnings to increase by 11.8% this year. Moreover, revenue in 2021 and 2022 could grow by 18%.
