PayPal Explores Blockchain, Cautious on Cryptocurrencies
The payment service has built an in-house blockchain team, but for now refuses to deal directly with digital assets.
PayPal is exploring blockchain solutions, but is really cautious when it comes to Bitcoin (BTC), said CFO John Rainey in an interview with Yahoo! Finance.
“We have teams clearly working on blockchain and cryptocurrency as well, and we want to take part in that in whatever form that takes in the future — I just think it’s a little early on right now,” said Rainey.
PayPal remains one of the most conservative fintech solutions, and is seen as a competitor to digital assets. For a long time, PayPal has refused to offer direct payments for cryptocurrency-related activities, such as exchanges. At the same time, up and coming competitors like Revolut were not as risk-averse, offering services to exchange digital assets.
Also, it became clear that Bitcoin helped to transfer more value in comparison to PayPal back in 2018. The reason for this is that BTC transactions are large-scale, and there are no restrictions to size. On the other hand, PayPal has strict requirements on proving one’s identity, otherwise restricting transaction size to a relatively small sum.
PayPal also uses its influence to extract relatively high fees in comparison to digital asset transfers. The other chief difference is that PayPal is capable of freezing funds and restricting accounts, while Bitcoin is censorship-free. Still, PayPal has the advantage of gaining the trust of banks, while crypto-related companies often run into challenges in securing banking counterparties.
PayPal, however, is the next traditional business to explore digital assets. The news of PayPal having a blockchain team arrives just weeks after Facebook detailed its intention to introduce a digital asset to merchants and advertisers.
The renewed interest in PayPal’s position on Bitcoin follows the rise of the digital asset toward $6,000, with hopes of further growth until the end of 2019. Other digital assets, such as Ripple’s XRP and Stellar (XLM) are also making attempts in taking the market for international payments.