The topic of cryptocurrencies has long arrived among the big players in the economy. While Elon Musk directly invests in cryptocurrencies, PayPal chooses a different way to participate in the current and future developments around the potential currency revolution.
Since the end of 2020, the payment provider has been offering trading with this novel asset. By February 2021, over 300 million digital wallets had already been serviced by PayPal. The steadily increasing demand in recent years has exceeded the initial expectations of PayPal CEO Dan Schulman. In a Time Magazine interview, the PayPal president admitted that the demand for PayPal's crypto services is many times higher than he originally expected. This is very exciting for all involved.
Dan Schulman believes that existing financial infrastructures need to be modernized, as they have become too 'inefficient' for the demands of the modern economy due to expensive and slow international transactions. Therefore, the financial system will undergo a significant change in the next decade. The PayPal CEO predicts that there will be more changes in this period than the financial world has experienced in the last two decades. In ten years, the financial world would experience a huge declinein cash usage. Everything related to payments would then be done with a mobile phone. Credit cards would be displaced as a form factor, and mobile phones would take their place. Because today's mobile phones offer much greater value than just tapping a credit card.
Digital currencies
Central banks are also dealing with the controversial topic of 'digital currencies.' They need a strategy when the time comes that people no longer want to use fiat money in the form of cash. Schulmann criticizes central banks for continuing to work on projects to convert traditional fiat currencies like the US dollar into a digital version instead of focusing on innovative distributed ledger technology.
In October 2020, PayPal announced that it plans to implement additional crypto features. In the future, it will also be possible to buy, hold, and sell several different cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), or Litecoin (LTC).
When the new features were launched in the United States in mid-November 2020, the Bitcoin price was around $16,000. A few months later, a combination of various events reignited the hype around digital currencies, driving the Bitcoin price to a new all-time high of $64,000 in April 2021.
Introduction of crypto cash service
The upward trend in prices and the steadily increasing demand for crypto assets led to further expansion of PayPal's crypto services. At the end of March 2021, a crypto cash service was introduced, allowing for easy deposits and withdrawals with cryptos for merchants.
Additionally, the payment platform Venmo, which is also part of the PayPal group, announced in a recent press release that it will implement trading with the four major coins BTC, Ethereum, Litecoin (LTC), and Bitcoin Cash (BCH). After the press release was published, the service became available. Users of the Venmo app can buy, hold, and sell the mentioned cryptos directly through the app.
