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Dan Schulman, the CEO of online payments giant PayPal, which recently started to accept cryptocurrencies, presented his diagnosis of the shortcomings of the current financial system, saying it is inefficient and leads to the exclusion of millions of people, while the company is watching cryptocurrencies with increasing interest.
“The pandemic has highlighted the harsh reality with which billions of people around the world are struggling to cope. In fact, in the past nine months, more than 100 million adults have fallen into extreme poverty. The current financial system simply doesn’t work for most people. It is inefficient and costly for the most precarious people,” Schulman said yesterday when asked about PayPal’s results for the third quarter of 2020.
He said modern technology combined with an emerging financial platform has the potential to tip the balance in favor of the disadvantaged majority, driving “a future of inclusion and financial health”.
“Central banks around the world are seriously exploring and testing forms of digital currency that they issue directly. And it is also clear that digital wallets are a natural complement to all forms of digital currency,” he added.
With this in mind, the company is launching cryptocurrency services for its users, including a new digital wallet, and plans to adopt digital currencies from central banks (CBDCs).
The company’s CEO predicts that the digitization of the digital economy, combined with the growing popularity of digital wallets will drive PayPal’s growth over the next decade.
Schulman confirmed that the company has already deployed its new cryptos services to 10% of its customers in the US “a few days ago”, while the rest of its US customers should be able to use it within the next two to three weeks. According to the CEO, their customers are “very eager” to start using the cryptos and their waiting list of new cryptos users has exceeded their expectations by “2 to 3” times. Due to a more significant demand than expected, PayPal has stated that it will increase its weekly crypto purchase limit by 50% to $15,000 USD.
“We are investing to create one of the most attractive and least expensive digital portfolios in the world, and you can see that this is starting to be reflected in our strong third quarter results,” said Schulman, adding that the last quarter brought a record total payment volume of $247 billion to the platform.
Commenting on Venmo, the company’s digital wallet application, the CEO said that its consumer base exceeds 60 million, making it a strong driver for the company’s planned expansion.
“We’re seeing a substantial increase in usage of Venmo as the pandemic continues, as more and more consumers turn to it to live their financial lives, including through the adoption of direct deposit functionality and, later this year, the Venmo credit card,” Schulman said.
PayPal plans to expand its new encryption services to other countries and Venmo in the first half of 2021.
“This is just the beginning of what we want to do,” said the CEO, adding that he sees “a lot of interesting things” they can do with crypto-assets. Schulman did not give details of those plans.