Dan Schulman, CEO of PayPal, spoke about the expansion of his company in the field of cryptocurrencies in an interview with Time. He said he was looking forward to transforming e-commerce into a personalised shopping experience driven by social media platforms. Bitcoin could give impetus to such a change to be transferred to the entire financial system.
Schulman believes that 2020 was a critical year in which “the trend of digital payments accelerated by three or even five years“.
The Covid-19 pandemic has led many to start using PayPal and other similar platforms for their daily shopping. Schulman released data showing that PayPal was used last year for $15.4 billion in payments totalling $936 billion. This trend could lead to such an increase in 2021 to meet PayPal’s desire for 300 million users.
PayPal CEO believes that the use of cash for payments will decrease in the next decade. A change that will not leave unaffected standard payment methods such as credit cards and checks. Predicting that bitcoin and other cryptocurrencies will benefit, he said:
“And when all this starts to happen, central banks need to reconsider monetary policy, because you can no longer produce more paper money into the system because people do not use paper money. And so come digital currencies.”
He also described the traditional financial system as “inefficient” and called for “modernisation” to make it more inclusive and cost-effective. On average, a transaction in this system can have an average charge of 2.8%. That’s why many are forced to trade outside of it, Schulman said:
“You would expect the volume and technological improvements to decrease, but the worst thing with the 2.8% when you have less income, or when you are out of the system, and you are not wealthy, then this percentage they get is like 1.000 basis points, not 280 basis points. Is there a way to do things more efficiently, at a lower cost, and add utility to the system? ”
Central bank issuance digital currencies (CBDCs) could be a tool to achieve this. For example, with a digital dollar, financial assistance provided by the US government to its citizens could be made through the PayPal platform. Respectively, the citizens through this platform could pay their taxes.
PayPal has been considering cryptocurrency services recently, since 2014. But instability and low adoption rates have been a deterrent to their implementation until recently. But now the time has come. In ten years, PayPal and bitcoin could be integrated into a super-application that would act as a bridge, connecting people to other applications. This way, users could have more control over their data and how they interact with products and services. Regarding the demand for bitcoin and other cryptocurrencies, Schulman said:
“The demand for cryptocurrencies has been many times higher than we expected. There is a lot of excitement.”