PayPal CEO Dan Schulman has stated that he believes Central Bank Digital Currency (CBDC) and cryptocurrency adoption is no longer just a possibility, but now a certainty.
Speaking on CNBC’s Squawk Box on Nov 23, Schulman revealed that from next year, PayPal will permit all transactions on the platform to take place using cryptocurrency as a funding source. This he said, will “significantly bolster the utility” of cryptocurrency.
PayPal’s Giant Crypto Play
On Oct 21, BeInCrypto reported that PayPal would permit users to buy, sell and hold bitcoin (BTC), litecoin (LTC), ether (ETH), and bitcoin cash (BCH) using PayPal wallets.
The announcement generated much excitement and may have further boosted bitcoin’s ongoing bull run due to the potential new markets opened up to crypto adoption. PayPal has more than 346 million global accounts and had a total transaction value of $222 billion in Q2 of 2020 alone.
Schulman explained that based on conversations with regulators and central banks around the world, he believes that CBDC issuance is set for a breakout, and this will boost crypto adoption alongside it. In his words:
“After talking to regulators and central banks around the world, it became clear to me that it’s not a matter of if, but when and how we will start to see more and more central banks issue forms of digital currencies, and I think you’ll have more and more utility happen with cryptocurrencies.”
Crypto Adoption With a Caveat
Speaking further, Schulman revealed that from next year, PayPal users will be able to carry out transactions with any of the platform’s 28 million merchants using crypto as a funding source. Transactions, however, will still be carried out in fiat currencies with the platform offering merchants the fiat equivalent of users’ crypto funds.
Clarifying how this would work, he said that PayPal will use active dynamic conversion of crypto-fiat pairs to send the real-time equivalent fiat amount to the merchant, removing the volatility risk away from the merchant.
The purpose of this he said, is to give users another payment alternative. Schulman believes the COVID-19 pandemic has pushed consumer habits further away from cash.
Responding to a question about the hypothetical scenario of a regulatory crackdown on bitcoin raised by Jamie Dimon, Schulman hinted that PayPal would always prioritize its relationship with regulators first:
“I think it is foundational that we work hand in hand with regulators. Our move into the crypto space happened because we worked hand in hand with the New York Department of Financial Services… I don’t think you can manage or move money without working hand in hand with regulators.”