One of the most discussed topics within the crypto community recently has been PayPal’s announcement that its customers will be able to buy and sell cryptocurrencies. The service is expected to be fully rolled out early next year.
The company’s goal “to increase consumer understanding and adoption of cryptocurrency,” as stated in its press release, seems to be a needed step in cryptocurrency popularization. Mainstream awareness of crypto still remains very low. As data from a Statista survey indicates, Bitcoin (BTC) use in countries with developed economies is below 10%, with the lowest levels in Sweden, Denmark and Japan. Meanwhile, some optimistically predict that this number will grow to 90% of the U.S. population by 2030.
PayPal’s president and CEO, Dan Schulman, said that “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.” Similarly, the former prime minister of Malta, Joseph Muscat, told the General Assembly of the United Nations in 2018 that cryptocurrencies were the “inevitable future of money.”
PayPal will begin by offering its services for users with Bitcoin, Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH), and the company has acquired from the New York State Department of Financial Services what it claims to be a “first-of-its-kind” conditional BitLicense — a license required to operate a digital currency business in New York — and partnered with United States-based stablecoin operator Paxos to enable this service for its customers.
Considering that PayPal had a reported 346 million active users in the second quarter of 2020 — a figure that has since increased in the third quarter to 361 million, according to its latest quarterly report — the decision to offer its customers services related to cryptocurrencies seems to be a significant step toward mainstream adoption. Last year, Cointelegraph asked experts in the crypto and blockchain industries for their opinions on crypto mass adoption. This time, the question was: Could PayPal’s recent announcement of beginning to offer crypto payments possibly force the mass adoption of crypto?
Cristina Dolan, founder and CEO of InsideChains and vice chair of the MIT Enterprise Forum:
“This is a very exciting announcement that will help increase crypto adoption for traditional value transfer or payments by offering an easy and integrated solution for the 346 million active PayPal users. The most challenging part of utilizing crypto for payments is the on-and-off ramp from the crypto blockchain networks using keypairs to make a payment or a transfer. Reducing that friction at the transaction point will make it easier to integrate it into simple value transfer use cases, therefore making it less intimidating. This may even increase the velocity of crypto and Bitcoin spending across the network while increasing its perceived usability and value as a currency, not just a store of value. PayPal dominates payments processing, yet integrating crypto may also attract new customers.”
Dominik Schiener, co-founder of the IOTA Foundation:
“Since there is no change to the merchant end of these transactions, right now the adoption would be on the user end. PayPal adding crypto as an option for users does speak to a future in which both ends of the transaction are engaged in crypto, which is very exciting for our adoption. This will eventually lead to mass adoption as well as a new method of payments between not just users and merchants but smart devices and smart cities. As more payments platforms accept crypto, we will see that awareness grow into increased interconnectivity with IoT technology. Eventually, crypto will become a part of our daily lives as more companies use it for things like machine-to-machine payments, or our cars utilizing autonomous payments for tolls, charging and other services. Crypto transactions offer more options for touchless payments, in which our devices will handle the end-to-end transaction and we can keep our cards in our wallets.”
Jay Hao, CEO of OKEx:
“PayPal’s move into offering cryptocurrency services is extremely bullish for the space; however, it does not in itself signal instant mass adoption of them. What we are seeing, which is a very key sea change, is the normalization of cryptocurrencies like Bitcoin and their legitimization by institutions and large household companies. Paypal will start offering these services to its U.S. customers, but with some 350 million customers around the world, this is a big step toward greater awareness and acceptance. Of course, it does not mean that everyone will rush out and buy Bitcoin, but as it gradually becomes more accepted, particularly against the backdrop of an economic crisis in which fiat currencies are losing their purchasing power, more entrants will naturally come to the market. I think that many payments giants and tech companies like PayPal are also seeing the way that things are going and that they need to join it or get run over by it. I expect that the trend to come, and as we move into 2021, will be for more companies like PayPal, fintechs, hedge funds, brokers and banks to offer cryptocurrency services, whether that is the ability to purchase it or offering custodial services. All in all, the outlook is very promising, but we may have a while to wait until we can say that ‘mass adoption’ has been achieved.”
Jimmy Song, instructor at Programming Blockchain:
“The only thing that ‘forces’ Bitcoin adoption is the collapse of fiat money, which isn’t happening yet. PayPal’s announcement gives people an additional path to buying Bitcoin to store value or buying altcoins to gamble — that’s it.”
Mati Greenspan, founder of Quantum Economics:
“Yes. This move is likely a huge boon for the adoption of cryptocurrencies in real-world payments. Millions of people who prefer to pay with crypto are always looking for new vendors that accept them. PayPal is now effectively adding 22 million merchants to that list as well as opening the door for its over 300 million active customers. The immediate effects might be diminished, depending on the level at which PayPal allows customers to transfer crypto in and out of its site. However, in the long run, users will come to understand the vast advantages of using digital assets and realize that they can now transfer value without the need of any third party. So, in a way, PayPal is sowing the seeds of its own destruction.”
Roger Ver, executive chairman of Bitcoin.com:
“Of course, a platform with over 300 million active users helps push forward crypto mass adoption. Of the four cryptocurrencies PayPal added, it is the most bullish for Bitcoin Cash and Litecoin since those are the only two that are usable for on-chain payments at the moment.”
These quotes have been edited and condensed.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Author: Cointelegraph By Max Yakubowski