- PayPal plans to use Bitcoin and cryptocurrencies as “funding source” for transactions.
- According to CEO Dan Schulman, Bitcoin will prevail as a means of payment and overshadow its status as “digital gold”.
Dan Schulman, CEO of PayPal, discussed the future of Bitcoin and Central Bank Digital Currencies (CBDC) in an interview with CNBC’s Squawk Box yesterday. Schulman expressed his views on Bitcoin, noting that the usefulness of Bitcoin as a currency will eventually prevail over the “hodl ethos”.
I think you gonna have more and more utility happen with cryptocurrencies. One of the things we allow is not just making it easy to buy, sell and hold cryptocurrencies, but very importantly early next year we gonna allow cryptocurrencies to be a funding source for any transaction happening on all of ours 28 million merchants. That will significantly bolster the utility of cryptocurrencies.
However, in response to a question from moderator Andrew Ross Sorkin, Schulman also revealed that Bitcoin cannot be used directly as a currency for buying goods from merchants with PayPal. Instead, PayPal sees Bitcoin as another “funding source”, which means that PayPal immediately converts the Bitcoin into Fiat currencies to pay the merchant.
The consumer would also not have to worry about the volatility of Bitcoin during the transaction, as the conversion takes place within seconds. The amount of BTC to be paid is displayed accurately before each transaction. On the other hand, this also means that users only pay in the cryptocurrency and, moreover, cannot transfer the cryptocurrency to another wallet.
In this respect, Schulman also expressed doubts that Bitcoin will remain a “digital gold” in the long run. According to PayPal’s CEO, Bitcoin will establish itself more as a means of payment in the future, which could also stabilize BTC’s price in the long run:
As [cryptocurrencies]become more and more utilized in everyday commerce, I think they start to move from being less of just an asset class and more into a currency. And when you start to move crypto as a potential funding instrument, I think that bolsters its utility, and stabilizes it as well. It becomes less volatile because it can be used everyday, in your purchases.
Schulman further said that the introduction of CBDCs will become inevitable worldwide in the foreseeable future, and he explained that CBDCs will also help to increase the increasing use of cryptocurrencies. “Both can play an important role in the future,” said PayPal’s CEO.
PayPal increases the buying pressure on the Bitcoin market
Currently, hardly a day goes by without PayPal being in the crypto headlines and being associated with the Bitcoin bull run. The payment company is currently developing into a big player in the market and already purchases 70% of all newly mined BTC for its American customers. If Europe and other countries are added next year, PayPal could thus contribute even more to a shortage of Bitcoin’s offer.