PayPal’s Rumoured Foray into Crypto is for Adoption, Experts Agree
Adoption comes first for some industry insiders on what would be the main outcome of the rumoured plan that digital payment giant, PayPal, is preparing to support crypto transactions on its platform.
If it goes through, they see crypto exposure to PayPal’s over 320 million users having an impact on the space as a whole. The reported buying and selling of crypto directly from PayPal with a built-in wallet functionality for crypto storage is a first for PayPal which, up till now, only acts as an alternative means for the withdrawal of funds from exchanges like Coinbase.
The unconfirmed move, which will likely manifest in the next three months if true, can spur cryptocurrency adoption and pave the way for another stage of the digital payments revolution, they say.
The CEO of BRD, one of the first Bitcoin wallets in the app store, sees major companies like WhatsApp, Square, Robinhood, Fidelity, and others adding support for digital assets of late as a huge social validator to the industry. Adam Traidman says these household names are crucial to getting digital assets into the hands of consumers “because to get consumers to understand something radically new, you have to deliver it to them in something known or old. The more bridges that exist to what consumers already use, the faster the rate of adoption.”
For Nicholas Pelecanos, Head of Trading at NEM, PayPal listing Bitcoin to be exposed to its user base will help address two main factors that have always hindered Bitcoin’s adoption rate: a lack of understanding of the asset and a lack of understanding on how to gain exposure. He says the listing will solve the latter while the buzz created by the news will address the former.
Pelecanos adds: “In 2017, despite these two inhibiting factors, the cryptocurrency market cap surpassed $500B. Since then numerous on ramps have emerged: If the rumours are true, PayPal will be the biggest yet making the growth prospects of the space tantalizing.”
The two takeaways from the PayPal news if true, according to VP Sales and Business Development at METACO, Seamus Donoghue, are that crypto has a new on-ramp that will provide access to their 325+ million users; and that the payments giant offering Bitcoin will be the best news of the year for the top cryptocurrency’s adoption.
“The news offers another affirmation that traditional payment players can no longer ignore the potential business opportunity presented by crypto, and are now even willing to risk disrupting their own fiat based platforms,” Donoghue said. “Evidently, PayPal has seen the success Cash App has had with crypto and wants a piece of the pie, and may view Venmo as a potential means of building a similar, sustainable business model. In 2017, retail fear of missing out was the theme that drove BTC towards $20,000–the interesting question now is: are we on the edge of an institutional fear of missing out that could bring crypto into the mainstream?”
While Singapore-based KuCoin exchange announced that its P2P fiat market has added support for US dollars via PayPal, a look at the rumoured plan from another perspective raises some questions on how the development is likely to impact the crypto space negatively.
Though not fully ascertained, the question of whether it is healthy for so much power to be entrusted to a middleman (Paypal in this case) for crypto transactions even when such opposes what cryptocurrencies are meant to cut off comes first. The other point seeking clarity is whether PayPal’s supposed entry into the space won’t crush out smaller cryptocurrencies if it – being a middleman – becomes too powerful especially as it is not yet clear if other altcoins would be listed alongside Bitcoin.