The payment service provider PayPal has presented its quarterly figures. The crypto business is doing well and should be expanded even further. But the focus of PayPal’s blockchain ambitions remains different.
In 2020, PayPal was partly responsible for ensuring that the Bitcoin course was able to quickly free itself from the Covid-induced turmoil in 2020. When the payment service provider enabled its US user base to buy and sell Bitcoin and other cryptocurrencies, the BTC and Co. not only gave a new boost to legitimacy, but also opened up access to the new asset class for millions of potential traders. It was only in April of this year that the PayPal subsidiary Venmo dared to step into the crypto sector.
PayPal plans the “Super App”
The PayPal app is about to undergo a major overhaul. In addition to a new user interface, the new app should above all offer a larger range of functions. It is supposed to become a “super app”, a concept that has so far been widespread, especially in Asia. Super Apps offer various cross-industry services under one digital roof – for example P2P payments, direct messages and restaurant bookings.
When it comes to crypto, PayPal has so far been anything but a great app. Users can only buy and sell cryptocurrencies. Withdrawals are not possible – an affront to the crypto ideal of decentralization. Will the planned super app give its users the opportunity to transfer crypto currencies to their own wallets? During the quarterly results presentation, PayPal CEO Dan Schulman chatted:
We are still very happy with the momentum we are seeing in cryptocurrencies and we are of course gradually adding more features. We are in the process of doing an open banking integration that has the ability to be fully integrated with ACH [Automated Clearing House] and will improve for making faster payments. And we will be introducing trading in the UK, hopefully by next month. We are currently working on transfers to third-party wallets. And we really want to make sure we have a seamless tax and tax filing process. We are considering how we can integrate this into trading and the “buy with crypto” functionality on our platform,
so Schulman im Investor call (from about minute 59:00).
CBDCs remain a focus
However, the PayPal CEO immediately tries to emphasize that the above points are not the main focus of PayPal’s crypto engagement. Schulman, on the other hand, focuses primarily on developments in the area of digital central bank currencies (CBDC).
All of this is interesting, but it’s not the main focus in terms of what we’re trying to do with our blockchain and digital currency business unit. We are clearly thinking about what the next generation of the financial system will look like, how we can help shape it, and we are working with regulators and central banks around the world. The number of countries dealing with CBDCs is growing rapidly.[…] There is clearly an opportunity to think about new infrastructure that can be more efficient,
explains the PayPal boss. Schulmann thus reinforced its position from the presentation of the quarterly figures for Q4 2020.
PayPal is a perfect match for central banks and governments to distribute this CBDC in a modern way so that more people can access the digital economy and we think this is a focus area of this new business unit that we have built,
Schulman said in February.
You can find out what the current CBDC ambitions of the ECB and Co. are in the regulatory ECHO on July 19.