PayPal confirms interest in crypto ahead of Q2 earnings
For a long time, there have been rumours about PayPal’s interest in the cryptocurrency industry. The suspicions have been confirmed in the form of a letter the company sent to the European Commission (EC). The letter was in response to the Commission’s public consultation on the EU’s structure for cryptocurrency markets.
PayPal’s Interest in the Cryptocurrency Market
In the letter to the European Commission, PayPal indicated that is “continuously monitoring and evaluating global developments on the crypto and block chain/distributed ledger space”. PayPal views the ledger technology as an apt channel for enhanced financial inclusion.
In March, the EC’s letter highlighted PayPal’s backing of the synchronized licensing approach by the European Union. The firm also suggested having clear definitions of activities in the crypto industry. Similarly, it advocated for a technology-neutral regulatory framework.
PayPal is at it Again
This is not the first time that the global payments firm has dipped its feet in the cryptocurrency waters. PayPal was a participant in the creation of Libra. Libra, which is a digital currency proposed by Facebook, is not yet in circulation but has gained immense hype globally.
The company has since then exited the project but the company has been focusing on its cryptocurrency initiatives.
PayPal is not the only technology giant investing in cryptocurrencies. Square, the payment giant started by Jack Dorsey, has been facilitating Bitcoin payments for years. Indeed, according to management, Bitcoin transactions rose by more than 80% in the first quarter.
Similarly, giants like Mastercard and Visa, too, have been attempting to leverage on the popularity of cryptocurrencies. MoneyGram has also partnered with Ripple to accelerate foreign remittances using its network.
Still, cryptocurrency remains a difficult industry for companies like PayPal and Square especially after the recent Twitter hacking.
PayPal growth accelerating
The company revealed its crypto ambitions two weeks ahead of its second-quarter earnings. Analysts expect that the company will prove resilient even with the pandemic. For example, those analysts polled by Reuters see the firm making more than $4.6 billion, up from $4.3 billion in the same quarter last year.
Final thoughts
Over the years, PayPal has proven to be focused on growth. The firm, which was started to offer peer-to-peer transfer services, has since expanded its services to other businesses. For example, the company offers payment services through its BrainTree business. It also helps people save money when shopping through its Honey business. All that has helped the firm become the third financial services company in the world after Visa and JP Morgan.
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