PayPal’s move this week to allow customers to transfer crypto out of PayPal’s cryptocurrency walled garden to external wallets is the opening step from a fiat-orientated world to a digital currency one, according to CEO Dan Schulman.
Schulman, who was joined on stage at Consensus 2022 in Austin, Texas, by PayPal crypto lead Jose Fernandez da Ponte, said that his company is playing a long game with crypto.
“We will instantaneously take your crypto and translate it in to fiat, and you will be able to use that in any one of our 35 million merchant accounts, so we are trying to add functionality,” Schulman said. “But what we just did with transfers is kind of like the opening step as you might think about us moving from a fiat-orientated world to a digital currency one.”
At first glance, PayPal’s long-awaited move is simply the fintech following a trend that includes Robinhood and other crypto apps. But enabling consumers to get crypto in and out of their PayPal wallets also leverages large, disparate networks, da Ponte said.
“Let’s assume there’s 100 million crypto users. The PayPal network that has hundreds of millions of consumers and millions of merchants was related but separated. We built a bridge between this fiat universe and this crypto universe. And the value of those two networks combined is going to be so much higher,” da Ponte said.
Crypto has been a non-starter when it comes to a payment method, but the stars are aligning in terms of stablecoins, regulation and digital identity innovation, Schulman said. “The volatility will lessen over time; the utility will increase,” he said.
Echoing some of the other CEOs speaking in Austin this week, Schulman said the current crypto winter is a time to double down. Asked if he owns any cryptocurrency and what he uses it for, especially since PayPal users can send their coins to MetaMask and buy NFTs (non-fungible tokens), Schulman said: “I buy, hold and sell – sometimes outside of PayPal. I don’t sell that often.”