PayPal Files Patent Application for NFT Purchase and Transfer System
According to Cointelegraph, PayPal has filed a patent application for a nonfungible token (NFT) purchase and transfer system, marking a significant step towards creating its own blockchain ecosystem. The application, filed in March and published on September 21, outlines a method for conducting transactions with NFTs both on- and off-chain. The patent application, which is still pending, describes a system where users can buy and sell NFTs through a third-party service provider, although the provider is not specified. Ethereum is mentioned in the text.
PayPal envisions using the full potential of NFTs for tokenization, extending beyond the exchange of electronic collectibles. The NFTs could represent any unique piece of digital data that can be tracked using a decentralized blockchain ledger, such as digital images, videos, music, collectibles, and other digital art, as well as deeds to personal property, event tickets, legal documents, and other real-world items. The system could be customized in various ways, including accommodating fractionalized purchases through the distribution of governance tokens, which could then be traded themselves. Additionally, a decentralized autonomous organization associated with the service provider could be used to promote NFT liquidity through a dedicated platform, and NFTs could earn income from royalties.
The service provider's processing could include compliance and risk management. Users could have their own digital wallets, but would not be required to. A third-party broker could offer a range of storage and checkout services as an alternative. Off-chain transactions could be managed within an 'omnibus wallet' associated with the service provider and containing both the buyer and seller's wallets, eliminating the need to register the transfer on the blockchain or pay the gas fees associated with an on-chain transaction. The application states that any currency could be used in the system. In August, PayPal introduced its own stablecoin, PayPal USD (PYUSD), built on Ethereum.