By Josiah Wilmoth
PayPal CEO Dan Schulman is dampening expectations that the payment processing giant is planning to make a splash in the cryptocurrency industry.
Just an ‘Experiment’: PayPal CEO Calms Hype After Cryptocurrency Patent Raises Eyebrows
Schulman, who was speaking at the Economic Club of New York in Manhattan, told attendees that cryptocurrency is currently just “an experiment” with an “unclear” future.
“Regulations need to be sorted out and a whole number of other things,” Bloomberg quotes Schulman as saying at the event, which was held on Thursday. “It’s an experiment right now that is very unclear which direction it will go.”
As Strategic Coin reported, PayPal had raised eyebrows last week when it filed a patent for a system designed to increase the speed and privacy of cryptocurrency transactions.
Simply put, the proposed system would utilize a multi-tiered wallet structure that automatically divides user balances into secondary wallets that each hold a pre-defined amount of currency — just as most people would exchange a $100 bill for smaller bills of varying denominations for ease of use.
PayPal’s system would allow users to make transactions by swapping private keys to the secondary wallets, all of which would occur behind the scenes. Since the transactions would not take place on the cryptocurrency network itself, it would settle instantly, privately, and presumably at little or no cost.
PayPal May Not Have Any Near-Term Crypto Plans, But It’s Getting Ready Anyway
Schulman’s comments indicate that PayPal likely does not have any plans to roll out cryptocurrency-integrated products anytime soon. However, the mere fact that they are devoting resources toward this field is itself a significant statement.
“The timing of the patent application vs. more recent public commentary by PayPal suggests that any near-term solutions by PayPal to make crypto merchant payments scalable may have been de-prioritized,” Jason Deleeuw, an analyst at Piper Jaffray, wrote in a note this week to clients. “Still, PayPal has said crypto assets have long-term merit and could eventually see ubiquity and acceptance as an everyday form of payment.”
Notably, PayPal co-founder Peter Thiel has said that he is bullish on bitcoin’s potential to serve as “digital gold,” and his Founders Fund recently told investors that it had made a significant investment in the flagship cryptocurrency.
Strategic Coin is a leading research and advisory firm for companies planning to integrate blockchain capabilities into their business model via utility token launches. Our customer research reports provide qualitative and quantitative analysis of token use cases and platform value. With the Strategic Coin Advantage network of partners, we offer customized services for the pre-launch, full-launch, and post-launch phases of Token Generation Events (TGEs).
Featured Image from PopTech, Kris Klug/Wikipedia