Following the launch of its PYUSD stablecoin, PayPal looks set to continue its foray into the blockchain ecosystem. Non-fungible tokens (NFT) and, more specifically, the tokenization of real-world assets, could be the next areas of innovation and development for the company.
PayPal on the verge of becoming a tokenization player?
On March 21, 2022, online payment giant PayPal filed a patent application for a system for purchasing and transferring non-fungible tokens (NFT).
The application, published on September 21 and revealed by our colleagues at Cointelegraph, describes a method for carrying out transactions with NFTs, both on-chain and off-chain.
Currently under review, the patent application depicts a mechanism whereby users can exchange NFTs using a third party. Although the latter is not explicitly mentioned, several references to Ethereum are included in the application.
PayPal also states in its application that this system would be enhanced by a wide variety of customization options. In particular, the company mentions the possibility of making fractional acquisitions by distributing governance tokens, which in turn could be traded.
“NFT can represent any unique piece of digital data that can be tracked using a blockchain’s decentralized ledger. […] Examples of such assets include images, videos, music, collectibles and other digital works of art, as well as personal property deeds, event tickets, legal documents and other real-world items. “
This passage from PayPal’s patent application indicates that the company is not only interested in collectible-type NFTs, but also Real-World Assets (RWAs), where tokenization is used to represent real assets such as commodities or government bonds on the blockchain.
Schematic representing an off-chain NFT exchange
Although this request dates back to March 2022, this initiative by PayPal demonstrates just how much the company is increasingly embracing Web3.
After the launch of its PYUSD stablecoin, the next logical step would be to give it concrete use cases, enabling it to stand out from its competitors and make its mark.
