Recently, PayPal President and CEO Dan Shulman released new details on the expansion of the payment giant’s Bitcoin and cryptocurrency services.
During the PayPal investor update conference call for the second quarter of 2021 , CEO Dan Schulman hinted that the purchase and sale of cryptocurrency cryptocurrency functions would be opened in the UK as early as next month in order to fulfill the company’s commitment in February. At the same time, it was mentioned at the meeting that the initial version of the company’s super application wallet has completed the code part, and plans to fully promote the wallet in the United States in the next few months. Schulman said that the super application wallet will have features such as high-yield savings, early access to direct deposit funds, messaging functions, and additional encryption functions. Each wallet will be “unique”, driven by advanced artificial intelligence and machine learning capabilities.
Some analysts believe that this good news will boost confidence in the cryptocurrency market.
· Paypal’s cryptocurrency expansion road·
Looking back at PayPal’s attempts in the cryptocurrency market, the company’s layout in the cryptocurrency market has already begun to take shape.
As early as 2013 , PayPal expressed its interest in cryptocurrency for the first time. David Marcus, the president of PayPal at the time, publicly stated that he “considered adding cryptocurrency to PayPal’s financing tools.” However, a few months later, Marcus left PayPal and joined Facebook to lead the Messenger product, and was selected in 2018 to promote the platform’s cryptocurrency project Libra.
At the end of 2014 , PayPal announced for the first time the establishment of a business relationship with an encryption technology company, and reached cooperation with Coinbase, BitPay and GoCoin to make online Bitcoin payments possible. The price of Bitcoin also rebounded with this news, achieving a daily increase of 10.61% , from $404 to $447.
In 2018 , PayPal submitted a patent application for the “Accelerated Virtual Currency Transaction System” to the United States Patent and Trademark Office (USPTO). It is proposed to reduce transaction time by creating a secondary wallet.
In December of the same year , Coinbase announced the upgrade of its PayPal integrated service, allowing US users to directly withdraw fiat currencies from Coinbase to their PayPal accounts for free. The service was rolled out to 32 European countries two months after its launch .
In April 2019 , PayPal made its first investment in the encryption field and participated in the A round of financing of the Cambridge Blockchain.
In June 2019 , PayPal joined the Libra Association and further entered the field of cryptocurrency. However, four months later, PayPal became the first company to announce its withdrawal after Facebook-led projects were subject to strict scrutiny by regulators.
Earlier this month, PayPal will encrypt the user’s weekly purchases of assets from 20,000 US dollars to improve the 5-fold to 100,000 dollars, while also canceled 50,000 dollars to buy quota.
Jose Fernandez da Ponte, vice president and head of blockchain encryption and Crypto currency at PayPal, said in a statement that “These changes will give our customers more choices and flexibility in purchasing cryptocurrencies on our platform.”
PayPal officially entered the cryptocurrency market in October 2020 , allowing American users to use cryptocurrencies such as Bitcoin, Ethereum, BSC, and Litecoin to purchase, sell, hold, and checkout. The company later added the function of cryptocurrency transactions on its mobile payment application wallet Venmo. The consumption requirement of this product is $1, and users can conduct cryptocurrency transactions through PayPal without opening a special cryptocurrency wallet. This move is seen as an important step in introducing Crypto assets to mainstream buyers.
Data reference: PayPal financial statements PayPal 2020 Q1-2021 Q2 total payment
PayPal’s financial report shows that as of June 30, its active user accounts exceeded 400 million , and the total payment in the second quarter of 2021 was $ 311 billion , an increase of 36% year-on-year . Some analysts believe that the introduction of cryptocurrency transactions has promoted this data.
· Criticism and Questioning·
Currently, the PayPal platform only allows customers to buy and sell cryptocurrencies in the form of internal documents of debit (IOU). Encrypted assets cannot be withdrawn from the platform, nor can they be sent to other wallet addresses outside the Paypal ecosystem. This has caused some doubts in the market.
PayPal official website
Paypal stated in its official website statement that users have full ownership of the cryptocurrency stored in their account. However, users can only access the public address of the wallet, and the platform will not provide customers with private keys, which means that users are restricted from converting bitcoins to other platform wallets. Asheesh Birla, the general manager of Ripple, said that this approach is tantamount to depositing in a bank, and the confirmation of user assets is based on trust in the platform. In addition, Bitcoin security expert Andreas Antonopoulos said that the bitcoins purchased on the payment platform are not real bitcoins, but bitcoin price exposures adjusted by the custodian, and users have no way to review their actual reserves. For the platform, this does reduce many potential problems involving money laundering in cross-platform transactions. However, this centralized exchange approach is considered by some opinions to deviate from the original intention of Bitcoin’s decentralization.
In addition, PayPal’s cryptocurrency for online shopping has also attracted a lot of criticism. Critics pointed out that most merchants currently do not accept virtual currency payments, and transactions are still priced and settled in legal tender. In other words, so-called virtual currency transactions still need to be settled in legal tender through the exchange service provided by PayPal.
For PayPal’s further expansion in the cryptocurrency market, whether these problems can be solved is undoubtedly the concern of many stakeholders.
· New “Super App Wallet” function·
This conference call revealed a series of new features of the new PayPal wallet. For example, PayPal can send messages within the application, “additional cryptocurrency features” and so on. PayPal also revealed plans similar to WeChat to allow wallets to act as social platforms. But it’s worth noting that in this conference call, Schulman talked about the function of the new product that users are most concerned about-allowing users to use some of the most basic components of the Bitcoin protocol, that is, allowing users to withdraw Bitcoin to their own No more information was revealed when it came to the functions in the wallet. This has also caused some investors to worry about solutions to existing problems.
Whether it is this PayPal corporate conference call or its long-term deployment in the cryptocurrency market, it shows PayPal’s ambitions in the cryptocurrency market. Although the specific functions of PayPal’s new products are not yet clear, there is no doubt that they are being challenged and questioned. In the voice, PayPal is striving to gain a place in the crypto world.