PayPal has taken steps toward establishing its blockchain ecosystem by filing a patent application for a system to purchase and transfer non-fungible tokens (NFTs). This application, filed in March and recently published, outlines a method for using NFTs in both on-chain and off-chain transactions.
The pending patent describes a system where users can buy and sell NFTs through a third-party service provider. While the patent mentions Ethereum, it doesn't specify the provider.
PayPal's vision for NFTs goes beyond just trading digital collectibles. It sees NFTs as a means of tokenizing various types of unique digital data, extending to real-world items like property deeds, event tickets, legal documents, and more.
This system offers customization options, allowing for decentralized purchases by managing token distribution, which can then be traded independently. Additionally, "decentralized autonomous organizations associated with service providers can be used to facilitate NFT liquidity through dedicated platforms." NFT holders can also earn royalties.
The service provider's role may include compliance and risk management. Users can have their digital wallets, although it's not mandatory. Third-party brokers may provide various storage and checkout services as alternatives. Off-chain transactions can be processed within an "integrated wallet" associated with the service provider, containing both the buyer's and seller's wallets.
This system allows for transactions in various currencies, with PayPal having launched its own stablecoin, PayPal USD, based on Ethereum in August.
