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PayPal Prepares for Massive Crypto and CBDC Integration in 2021

Payment processing giant PayPal made a splash in the crypto industry two weeks ago when it announced that it would incorporate cryptocurrencies into its offering next year. However, the company appears to be going further as new details have surfaced about its plans for the industry. 

Opening the Door for Everyone 

In its recent earnings call for the third quarter, PayPal’s senior executives confirmed the firm would push aggressively into the crypto sector next year. Company chief executive Dan Shulman explained on the call that the world is moving rapidly to digital currencies. The firm has seen this, and they’re putting themselves in a position to serve the peoples’ needs. Citing discussions with industry leaders and regulations, Shulman expressed confidence in the emergence of digital currencies. He explained that PayPal plans to introduce its crypto services as early as possible in 2021, ensuring that users can effectively buy and sell these assets.

Besides the expedited Bitcoin support, PayPal also confirmed that it would bring crypto to Venmo, one of its subsidiaries, next year. The action will bring crypto services to international customers as well, with implementations set for the first half of the year. 

Currently, only about ten percent of U.S. customers have access to the new crypto service. Shulman said that the rest of the country would gain access in the coming month. The firm also alluded to increased interest following its October 21 announcement that it would bring crypto services into its core business next year. As a result, it has raised weekly crypto purchase limits from $10,000 to $15,000.

Partnering with CBDC Issuers

Shulman also pointed out that PayPal had noticed the increasing prominence of Central Bank Digital Currencies (CBDCs). More countries have confirmed plans at developing digitized versions of their currencies, with the hope of strengthening their payment infrastructures and maintaining their economic sovereignty. 

“I do think that our platform and all the new digital infrastructure that we’re putting in place right now can help make that management and movement of money more efficient, less expensive, and faster,” Shulman pointed out.

In response, PayPal hopes to help shape CBDCs’ utility. Shulman explained that they hope to facilitate CBDCs’ interoperability with current payment rails and improve their acceptance among merchants. 

PayPal is entering a pretty lean field. Not many payment processors offer crypto trading and transaction support, with the most notable being U.S competitor Square through its Cash App. With an aggressive push, PayPal is hoping to corner the market and target the crypto-loving user base.

PayPal’s entrance already caused significant excitement among investors. Since the company formally entered the space, Bitcoin has surged to a yearly high and broke the $13,000 mark for the first time since July 2019. Since then, the asset has remained comfortably over the $13,000 threshold, with bullish investors hoping to finish the year on a high.

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      Jimmy has been following the development of blockchain for several years, and he is optimistic about its potential to democratize the financial system.

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