PayPal has taken a significant stride towards establishing its blockchain presence by submitting a patent application for a nonfungible token (NFT) transaction system, with a publication date of September 21st. The proposed system aims to facilitate NFT transactions both on and off the blockchain.
In the patent application, PayPal outlines a framework allowing users to buy and sell NFTs through third-party service providers, with Ethereum mentioned as a potential platform. Beyond the conventional NFT use cases, PayPal envisions leveraging NFTs for tokenizing a wide array of digital and real-world assets, such as images, videos, music, collectibles, legal documents, and event tickets.
This innovative system offers extensive customization possibilities. Fractionalized purchases can be achieved through the distribution of governance tokens, which are themselves tradable assets. Additionally, a decentralized autonomous organization affiliated with the service provider may enhance NFT liquidity via a dedicated platform, potentially generating income through royalties.
To ensure compliance and risk management, the service provider will handle transaction processing. Users have the option of using their digital wallets, but it’s not mandatory. Alternatively, a third-party broker can provide storage and checkout services. Off-chain transactions can occur within an “omnibus wallet” associated with the service provider, simplifying the process without requiring blockchain registration or incurring gas fees.
Crucially, the system supports multiple currencies, accommodating various payment methods. In August, PayPal introduced its stablecoin, PayPal USD, built on the Ethereum network, demonstrating its commitment to embracing blockchain technology. PayPal’s patent application represents a significant move towards the mainstream adoption of NFTs and blockchain technology. With the potential to revolutionize how assets are bought, sold, and traded, PayPal’s vision may lead the way for a new era of digital asset ownership and transactional efficiency.