- PayPal CEO Dan Schulman revealed that user demand for cryptocurrencies on the platform is even higher than anticipated.
- Schulman noted that the coronavirus pandemic has greatly accelerated the digitalization of payments across the globe.
Just a few months after payments giant PayPal launched buying and selling features for Bitcoin and other cryptocurrencies, user demand for digital assets on the platform has already exceeded the company’s expectations "multiple-fold," revealed CEO Dan Schulman.
Speaking to TIME Magazine, Schulman said that, "Demand on the crypto side has been multiple-fold to what we initially expected," adding that, "There’s a lot of excitement."
Schulman explained that cryptocurrencies are just a part of the overall trend of digitalization of everyday payments, accelerated by the coronavirus outbreak. Ten years from now, he argued, there will be a "tremendous" decline in the use of cash and credit cards. Instead, most financial operations will be conducted via smartphones and "superapps."
The 'advent of digital currencies'
"When all of those things start to happen, then central banks need to rethink monetary policy as well because you can’t just issue more paper money into the system because people aren’t using paper money," Schulman explained, noting that it would result in the "advent of digital currencies."
He pointed out that today’s financial systems are rapidly becoming obsolete due to their slow transaction speeds and high fees. In this light, companies need to think about modernizing their existing financial infrastructure to "do things more efficiently, with less cost, more inclusively, and add more utility into the system."
"In the next 5 to 10 years, you’re going to see more change in the financial system than you have over the past 10 to 20 years," said Schulman, adding that the existing financial infrastructure "needs modernization, because it’s inefficient today."
The digital dollar and PayPal
According to him, central bank digital currencies (CBDCs) can also take advantage of blockchain technology, but "they’re basically digitizing a fiat currency like the US dollar." While not a full-fledged cryptocurrency, they can still have their use cases.
A digital dollar, Schulman explained, could enable the government to open up Fed funding to other institutions besides banks. That could potentially include companies like PayPal, he added, "where you could fund straight from the Fed right into a digital wallet."
This way, the government won’t have to send stimulus checks by mail, for example, but rather "just go directly into their digital wallet through a digital currency, instantaneous access, no cost and friction," he concluded.
Following its successful launch of crypto services in the US, PayPal is already eyeing further expansion of the scheme overseas, with plans to introduce Bitcoin buying and selling to UK customers.