- PayPal CEO Dan Schulman has in an interview revealed that his company has witnessed cryptocurrency demand beyond the initial expectations.
- He has also shared his views of what the financial infrastructure will look like in 5 to 10 years, a period in which he expects more changes in the financial system than witnessed over the past 10 to 20 years.
The President and CEO of PayPal, Dan Schulman, has been discussing cryptocurrencies and his company’s role in their recent build-up. In an interview with TIME, the CEO talked about how it “was pretty cool” purchasing boots on his own platform and paying in Bitcoin. This was realized because PayPal recently launched a crypto checkout service for US consumers. Users can buy, hold and pay using Bitcoin, Ether, Bitcoin Cash and Litecoin for merchandise. At the time, Schulman celebrated the move stating that this would be the first time where using cryptocurrencies would be as seamless as using a credit card or debit card on the PayPal wallet.
In the recent interview, the CEO has disclosed that the demand on the crypto side is multiple-fold to what the company initially expected. Furthermore, he explained why PayPal took long to adopt them,
We’ve been looking at digital forms of currency and DLT for six years or so. But I thought it was early, and I thought the cryptocurrencies at the time were much more assets than they were currency.
As an asset, cryptocurrencies are prone to price fluctuations discouraging businesses to accept. He added that there were concerns about regulations as digital currencies were still not mainstream. However, in recent months, this has been the case, compelling the governments to formulate regulations.
While PayPal only launched crypto payments last month, the CEO has confirmed that the shift to digital payments was greatly influenced by the outbreak of COVID-19. The lockdowns and a campaign discouraging physical contact spurred online payments. Paypal is reported to have processed 15.4 billion payments, with a value of $936 billion last year.
Schulman: Financial infrastructure needs modernization
Like most fintech executives, Schulman holds the view that the current financial system is outdated. In the interview, he stated that in the next five to ten years, all forms of payments will collapse into the mobile phone. Venmo, a mobile payment system owned by PayPal has only last week adopted cryptocurrencies. The platform announced it will let its more than 70 million users spend as little as $1 to buy Bitcoin, Ether, Litecoin and Bitcoin Cash. Users can also hold or sell using the platform.
The general manager of Venmo, Darrell Esch, stated that Venmo was seeking to be a trusted platform where users can learn and engage with cryptocurrencies. The current financial infrastructure has been slow, inefficient and expensive. One of the ways modern economies plan to upgrade their systems is through Central Bank Digital Currencies (CBDCs).
Central bank-issued digital currencies can also take advantage of distributed ledger technology [DLT] or other modern technologies, but they’re basically digitizing a fiat currency like the U.S. dollar.
The PayPal CEO believes that if the US introduced a digital dollar, it would allow for the Fed to not only fund banks but other institutions such as PayPal. Admittedly the US is lagging behind with other countries already testing, issuing, or in the final stage of development of the same.