Digital payments provider PayPal has filed a patent application for a system that enables the transfer and trading of non-fungible tokens (NFTs) within its network. The patent application, filed in March 2022 but made public in September 2023, describes a system that allows users to transfer NFTs on the PayPal network through an off-chain transaction via an NFT marketplace. The system provides access to the NFT marketplace for digital wallets associated with a service provider, with the marketplace being decentralized and associated with a different entity.
The system operates by receiving a request from a user to perform a transaction involving the purchase of an NFT associated with a specified source address. If the specified source address corresponds to another user of the service provider, the identifier associated with the NFT is updated to reflect the first user’s ownership.
This move by PayPal further solidifies the mainstream potential of NFTs, even as the industry faces challenges with falling prices of popular projects like Bored Ape Yacht Club. In recent months, PayPal has shown increased activity in the cryptocurrency sector. In August, the company launched PayPal USD (PYUSD), a stablecoin fully backed by U.S. dollar deposits. It also introduced its Cryptocurrencies Hub feature, allowing users to hold and interact with cryptocurrencies through their PayPal account.
Given these developments and the newly filed patent application, it is likely that PayPal will integrate NFTs into its Cryptocurrencies Hub once the application is approved. As of now, the patent is pending.
