PayPal Dubs Blockchain 'The New Financial Rail,' Promises 'Innovation In Payments'

Payments and e-commerce giant PayPal has declared that blockchain is the new financial rail and promised it will continue to introduce "innovation in payments."

After dipping its toes in the world of stablecoins and slowly emerging as a crucial player in the cryptocurrency industry, PayPal has praised blockchain technology for revolutionizing the global payments system.

"Blockchain is the new financial rail — the new payment rail. Blockchain technology collapses how payments look and how they actually operate. Settlement times are near instant to both a customer and a business — at any time, anywhere in the world," PayPal said in a blog post, titled "Pay How You Want."

The payments giant highlighted that while some may view blockchain technology as just a fad, its role in the "tectonic shift" in the global payment system "cannot be understated."

The technology is "a payment instrument that offers round-the-clock, near immediate and cost-effective transactions, it's a practical choice to explore that solution. It's not about jumping on a trend; it's about recognizing and adopting an alternative, possibly better financial technology for payments," it wrote.

PayPal said its stablecoin, PYUSD, is just the "next evolution" toward its goal of continuously providing customers with "trust, confidence and ease."

"Today, blockchain technology is the only innovation that provides a fundamentally new payment rail that helps deliver that customer desire. We have always aimed to be a vanguard in one aspect: always giving our customers what they want and deserve — trust, confidence, and ease. PYUSD is just the next evolution towards that goal," the blog read.

Patent filings uncovered in September revealed that aside from stablecoin, PayPal was also planning to navigate the world of layer-2 network and non-fungible tokens (NFTs).

PayPal's research and development team is reportedly focusing on blockchain validation, payments between network layers and even digital asset recommendation in the metaverse, which are just some of the areas the financial payments giant is looking into, according to the company's patent filings.

The patent applications, initially filed in March 2022 and published in September, detailed how to select mines or validators while adding transactions to a blockchain. One of the documents mentioned how PayPal's method could "advantageously allow steering of blockchain requests to a desired subset of miners/validators."

Three other patent filings, published on Sept. 21, mentioned new methods to allow off-chain transitions through non-fungible token marketplaces. They talk about a system where users can purchase or sell NFTs using a third-party service provider.