Global payments giant PayPal is going to let users withdraw cryptocurrency to third-party wallets. The news comes with the appearance of the company’s blockain lead, Jose Fernandez da Ponte, at Coindesk’s Consensus 2021 conference. Da Ponte said:
“We want to make it as open as possible, and we want to give choice to our consumers, something that will let them pay in any way they want to pay. They want to bring their crypto to us so they can use it in commerce, and we want them to be able to take the crypto they acquired with us and take it to the destination of their choice.”
Right now, PayPal users only have the option to buy Bitcoin and other cryptocurrencies without taking it off the platform. While the company normally implements new developments every two months on average, it is yet unknow when the crypto-withdrawal functionality is becoming available.
The PayPal executive commented on rumors that PayPal might be launching its own stablecoin. While not outright denying any plans in the making, he said:
“This is way too early.”
Following up on that fact that PayPal vice president said he has met with central bankers around the world, da Ponte was also asked about central bank digital currencies (CBDC):
“It absolutely makes sense that central banks will issue their own tokens.”
“Sometimes we position the debate as CBDCs versus stablecoins, but it’s a bit of a fake debate. There is no trade-off. We think they will co-exist.”
According to da Ponte, priorities at central banks are twofold. They need to safeguard financial stability while assuring universal access. In his view, there are numerous ways to achieve stability with digital currencies. This does not necessarily involve backing a stablecoin with fiat currency but can be done by backing one with a CBDC.
Digital currencies could also aide expand access to the financial system. Da Ponta pointed out that with CBDC’s it does not matter whether there are no physical (bank)branches in a certain area.
When the time comes, da Ponte sees an important role for institutions such as PayPal to distribute CBDC’s to the public. He hailed the example of the stimulus checks that U.S. citizens received by email in the past year. Recipients had to travel to a physical bank to cash them in. This is not the most convenient way he said:
“I think we can do better than that,” said da Ponte.
While a lot of thought already went into CBDC’s, da Ponte believes there is still some time to go before it becomes reality:
“On the subject of CBDCs, there are a lot of Powerpoints written, but not a lot of code written.”
In order to offer serious payment cost reductions to people all over the world, the company believes a higher adoption rate of digital currencies globally is needed.
“But 10% adoption is where it gets really interesting, when it gets beyond the early adopters,” da Ponte concluded
PayPal started to offer cryptocurrency trading to U.S. customers in November and introduced crypto payment services this March. The company’s adoption of cryptocurrency seems to impacted results positively. Crypto users are logging more often than before they had bought in and the company reported better-than-expected results for the first quarter of 2021. Their adjusted earnings of $1.22 billion overshot analysts estimates of $1.01 billion.
In a recent interview with Time magazine, PayPal’s Dan Schulman said that demand for cryptocurrency has significantly exceeded the company’s initial expectations since it launched crypto trading in 2020. The executive is expecting “big changes” in the global financial system to come.
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