Over the past few months, there has been many news about cryptocurrencies as prices of some of the main digital currencies hit all-time highs.
More and more firms have also started to embrace this new digital currency, including Tesla, Square and PayPal.
Tesla for instance, now accepts bitcoin as a payment for its electric cars. Although this payment mode is only available in the United States for now, founder and CEO Elon Musk said that it will be extended to customers outside of US later this year.
In a recent interview with Time Magazine, PayPal CEO Dan Schulman shared some insights with regards to how the firm looks at cryptocurrency over the next few years. Here are some highlights worth noting:
Phasing Out Of Cash Transaction
Due to COVID-19, PayPal shared that US saw a rapid digitisation process three to five years ahead of their projection.
Because of this, Schulman foresees a tremendous decline in cash usage over the next five to ten years. This means that consumers will no longer use cash for payment as much as they do today.
With everything moving online, cash as a mode of payment is no longer effective and efficient, and we are seeing the rapid rise of digital currencies.
Nobody wanted to touch cash, and that led to a large increase in use of digital forms to not just pay, but to look at menus and to look at offers and that kind of thing in stores.
– PayPal CEO Dan Schulman
Rapid Modernisation Of The Existing Financial Infrastructure
On top of the rise of digital currencies, in the next five to ten years, Schulman expects huge changes in the inefficient financial ecosystem today.
He explained that the fact that it can take three days for you to get your encashed check, or seven days to an international remittance to reach its recipient, speaks volumes on the inefficiencies of the current financial system.
So when you think about it being expensive, exclusionary and efficient, we really need to start to thinking about ‘How do you modernise that system? Is there a way that you can do things more efficiently, with less cost, more inclusively, and add more utility into the system?’
– PayPal CEO Dan Schulman
One of the ways to solve this is through a central bank–issued digital currency, backed by the government. Through a digital currency, payments can be instantaneous with no cost or friction.
Multifold Demand For Cryptocurrency
In November last year, PayPal announced that it will allow all users to buy, sell and hold cryptocurrencies from their PayPal account.
Since then, Schulman shared that the demand for the service has been “multiple-fold” to what the team had initially expected.
“There’s a lot of excitement,” he said simply.
Then earlier in March, PayPal rolled out another new feature which allows US merchants to allow a “Checkout with Crypto” feature, enabling their customers to complete their online transaction via cryptocurrencies.
According to the company, customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at checkouts to make purchases.
It added that this service will be made available at all of its 29 million merchants in the coming months.
Merchants’ willingness to adopt technology necessary to accept bitcoins as payment for their goods is clearly to a large extent driven by business motivations, while the customer preferences to which merchants react to, may considerably be driven by their support for bitcoin on idealistic grounds.
As digital currencies become more and more widely accepted, we may soon see an inflection point in terms of mainstream digital currencies adoption.
Cryptocurrency and blockchain technology is a key content pillar for Vulcan Post, and we will be continuing to cover the development in this space. You can follow our coverage here.
Featured Image Credit: Geoff Pugh via Telegraph