PayPal to Bring Crypto to the UK and is ‘Working’ on DeFi
During PayPal’s Q2 earnings call, the payment aggregator revealed it will soon bring crypto trading to the UK—and is also open to various aspects of DeFi. The call showed how CEO Dan Schulman is keeping a close eye on the digital asset industry, with a focus on how PayPal can integrate within it.
PayPal’s Involvement with Crypto
Within the call, Dan Schulman was asked directly about crypto and blockchain technology by Ramsey El-Assal, a Barclays Investment Bank Analyst, to which he said:
“[W]e continue to be really pleased with the momentum we’re seeing on crypto…. We’re right in the middle of some open banking integration, which will increase the ability to fully integrate it into [PayPal’s clearing house] and do faster payments. We’re going to launch, hopefully, maybe even next month in the U.K., open up trading there.”
Although no hard deadlines were given, this is a positive sign for crypto in the UK, as it shows that PayPal is both paying attention to the industry, and looking to rapidly make a direct impact within the country. This integration is likely made easier due to the company’s recent acquisition of Curv, a digital asset security service, which “accelerates and expands PayPal’s initiatives to support cryptocurrencies and digital assets”, as their Earnings Release explains.
With over 4% of UK adults owning cryptocurrency, the country is well-known for its interest in digital assets. However, with the level of crypto knowledge declining in the UK, and a growing number of crypto holders who have below £20,000 in income, PayPal may have a tough job on its hands in terms of protecting users and mitigating individual risk.
PayPal’s worldwide involvement in crypto has been consistently growing– in April it provided fully ramped crypto options to its Venmo users, giving them the ability to engage with Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. In turn, the facilitating of crypto sales and purchases has also improved PayPal’s revenue, which is likely a major driver for its increased expansion into the industry.
Among the services being explored, Dan Schulman also revealed that PayPal is “working right now on transfers to third-party wallets” and trying to create a “seamless process for taxes and tax reporting”. Crypto taxation has been a hot topic worldwide, with the US looking to use crypto taxes as a funding source for its new infrastructure bill.
DeFi and the Next Generation of Finance
Within the earnings call, Dan Schulman mentioned the company is “clearly thinking about what the next generation of the financial system looks like, how we can help shape that” and further added:
“How can we use smart contracts more efficiently? How can we digitize assets and open those up to consumers that may not have had access to that before? There are some interesting DeFi applications as well. And so we are working really hard”.
This suggests PayPal could soon be engaging directly with the rapidly growing DeFi market. It would not be the first time that a major corporation has been paying attention, as Amazon has also been eyeing the industry, and Goldman Sachs has announced a (limited) DeFi and blockchain-focused ETF.
PayPal’s intrigue in the industry should come as no surprise. With many considering it to be the future of the financial landscape, it makes sense that centralized bodies would gravitate towards it and see what lessons they can learn.
Although no direct plans were announced by PayPal, Dan Schulman certainly seems to be thinking of ways to integrete with DeFi, and best position PayPal for the months and years ahead. This could mark an important turning point– with so many corporations vying for space in this industry, it looks as though DeFi will slowly become less decentralized as time goes on.
What do you think of PayPal’s plans with crypto? Let us know in the comments below.