A rumor has got spread earlier this month that PayPal would list crypto assets on its platform. As reported, the company is hiring crypto and blockchain specialists. Do these show the interest of PayPal in crypto industry?
PayPal thought little of Bitcoin back in 2013 but at the then period there was a doubt of whether Bitcoin will make its way to PayPal’s funding instrument or not. Few months later a message of hope came from John Donahoe, CEO at Ebay, saying the payment platform would have to integrate Bitcoin (BTC) to cope up with the evolving financial landscape.
Considering some favorable views from surroundings, PayPal made partnerships with three payment processors namely BitPay, Coinbase and GoCoin in 2014. But breaking the actual principles of Bitcoin transactions like not through integrating Bitcoin into its digital wallet, PayPal made a connection with third party to conduct Bitcoin transactions. At that time Ebay was PayPal’s parent company.
But a separation between PayPal and Ebay has been held in 2015 and Dan Schulman, who had mixed and more bearish views on crypto, took over PayPal’s responsibility as a CEO. PayPal appointed Wences Casares, CEO and founder of Bitcoin wallet Xapo, to its Board of Directors in 2016 and then in 2019, the payments giant backed a blockchain startup for the first time investing into Cambridge Blockchain.
John Rainey, chief financial officer of PayPal, has come away from crypto saying no need to enter the crypto space early on. And after one month of that PayPal became one of the founding members of the Libra Association and also left the organization due to regulatory backlash.
No reaction on rumors
A rumor has got spread on July 22 that PayPal is allegedly planning to offer custodian services allowing users to store their crypto using PayPal’s digital wallet. But a spokesman of PayPal confirmed it to be a rumor and speculation. A job listing posted by PayPal around the same time made rumors a bit more credible because PayPal advertised for a ‘’crypto engineer.’’ But PayPal is worried about the growth of blockchain technology which they expressed in its latest 10-K form filled with the United Sates Securities and Exchange Commission in December 2019.
Who will be PayPal’s competitors?
PayPal is the payments giant with its large 270m customers where all of crypto is less than 50m and so it is expected that once PayPal enters the crypto space, it will double the crypto community. There is no similar-strengthen industry to clash with PayPal and so PayPal might bring a whole new audience to the market.
Views on that vary from person to person like some think PayPal would be competing with top-tier exchanges like Coinbase while some other argues PayPal’s real competitors would be other fintech wallet apps like Robinhood and Revolut.
PayPal’s coming in the space could be a threat to every other fintech crypto app focused on payments and remittances. Several experts said that they wouldn’t be surprising that PayPal is looking at an overall adoption of digital assets.
Crypto market needs PayPal
Whether the implication of PayPal’s rumored expansion is authentic or not that depends on adoption because if the payments processor with its large customer base enters the space, it will make crypto more viable in the eyes of the financial mainstreams. Arrival of PayPal in the crypto space will drive more adoption and make the industry to become more rigid and consolidated. Through connecting crypto audience with traditional finance and onboarding new users to crypto space, it is expected that PayPal may benefit crypto industry. However, it becomes visible that PayPal is in demand among crypto users.