Payments giant PayPal confirmed on Friday that it’s looking to develop a stablecoin, a kind of cryptocurrency backed by the U.S. dollar. It would be the first stablecoin purpose-built for payments, the company said.

Why should we care?
By throwing its hat in the ring, PayPal is joining—and legitimizing—a booming class within crypto. Tether, Circle, and Binance have all minted stablecoins of their own. Their combined valuation was $11B just two years ago. It now stands at $164B. And, while PayPal’s reputation gives this crypto class more cred, it also forces the U.S. government to get its regulatory act together. Jose Fernandez da Ponte, senior vice president of crypto and digital currencies at PayPal, believes the project’s success rests in politicians’ hands; it’s hard for any currency to live up to its “stable” branding if it operates within a murky legal realm. “There would have to be clarity on the regulation, the regulatory frameworks, and the type of licenses that are needed in this space,” he said. The White House seems to agree: The President’s Working Group on Financial Markets released a report in November that urged Congress to establish clear stablecoin regulations. “If well-designed and appropriately regulated, stablecoins could support faster, more efficient, and more inclusive payments options," the Working Group said. Stablecoins blend fiat and digital currencies. If the government’s policies heavily favor stablecoin development, then we could see the crypto world pivot sharply, converting political purchase into material reward.