One of the biggest questions the crypto and blockchain communities have yet to answer is when would these technologies reach mainstream usage. That is beginning to be answered with the recent news of PayPal’s new service enabling users to buy, hold and sell cryptocurrency.
Coinbase then announced a debit card that lets you spend any asset in your Coinbase portfolio and earn rewards for each purchase. You don’t need to be an engineer to use either product and it is a giant step in the right direction for the space.
There has also been a big trend by central banks across the globe to begin development on central bank digital currencies. According to the Bank of International Settlements ten percent of central banks have said they will develop a digital currency within the next three years.
China has taken the early lead in this race and has already been conducting tests worth more than $300mn. The EU has committed to building a CBDC by 2025 and the U.S. has even said they are examining the issue, though they have yet to commit to a timeline.
For years, the industry has talked about the transformative nature of using these technologies to democratize access to financial services and make markets more efficient. One of the biggest impediments to that vision has been the complicated nature of the tech and making it easily accessible to the general public.
To be clear only about 15 percent of Americans own cryptocurrency as of late 2019. That number is up from about 8 percent in 2018, which shows the knowledge base is growing but wide scale adoption is not apparent yet.
PayPal is helping to breakdown the complicated barriers allowing crypto holders to use their PayPal wallets. “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president and CEO of PayPal, in a press release announcing the news.
As of this writing bitcoin is now above $13,500, and even surpassed $14,000 briefly, highs not seen since early 2018. Traders clearly believe the PayPal news has the potential to be a game changer with the payments firm having more than 345 million users and 26 million merchants globally. The price has also been impacted by the news that Square invested $50 million in bitcoin just last month.
CBDC’s will help tamp down the volatility and governmental unrest across the globe can also help to move more people towards crypto as a safe haven. There has always been a lot of potential with the crypto and blockchain community. For the first time a clear path to scale seems attainable.
Todd is the host of PitchIt: the fintech startups podcast, a weekly interview show featuring emerging fintech founders and leading venture capitalists. He is responsible for leading the content team which covers fintech through daily & weekly email newsletters, editorial, virtual events, and in-person conferences. He has been covering fintech, banking, and venture capital for more than 15 years, including speaking regularly at industry events.