There has been a lot of news about cryptocurrencies over the past few months as the prices of some of the major digital currencies have peaked all time.
More and more companies have also started accepting this new digital currency, including Tesla, Square and PayPal.
Tesla, for example, now accepts bitcoin as payment for their electric cars. Although this payment method is currently only available in the United States, founder and CEO Elon Musk said it will be extended to customers outside the U.S. later this year.
U recent interview with Time magazine, PayPal CEO Dan Schulman shared some insights into how the firm views cryptocurrency over the next few years. Here are some of the most interesting things worth noting:
Gradual cancellation of a cash transaction
Thanks to COVID-19, PayPal shared that the U.S. saw a rapid digitalization process three to five years before their projection.
That is why Schulman predicts a terrible decline in the use of cash in the next five to ten years. This means that consumers will no longer use cash to pay as they do today.
As everything moves online, cash as a method of payment is no longer effective and efficient, and we are seeing rapid growth in digital currencies.
No one wanted to touch the cash, and that led to a big increase in the use of digital forms to not only pay, but to look at menus and offers and things like that in stores.
– PayPal CEO Dan Schulman
Rapid modernization of the existing financial infrastructure
With the growth of digital currencies, in the next five to ten years, Schulman today expects huge changes in an inefficient financial ecosystem.
He explained that the fact that it will take you three days to cash your check or seven days until the international remittance to reach your recipient, speaks volumes about the inefficiency of the current financial system.
So, when you think that it is expensive, exclusive and efficient, we really have to start thinking about “How do you modernize that system? Is there a way to do this more efficiently, at less cost, more comprehensively, and add more utility to the system? ‘
– PayPal CEO Dan Schulman
One way to address this is through a digital currency issued by the central bank and backed by the government. Through digital currency payments can be instantaneous, without cost and friction.
Multiple 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 has shared that the demand for the service is “multiple” compared to what the team initially expected.
“There’s a lot of excitement,” he said simply.
Then, in early March, PayPal introduced another new feature that allows U.S. merchants to enable the “Checkout with Crypto” feature, allowing their customers to perform their online transactions via cryptocurrencies.
According to the company, customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will be able to convert their holdings into fiat currencies at the checkout.
He added that this service will be available to all its 29 million retailers in the coming months.
The willingness of traders to adopt the technology necessary to accept bitcoin as payment for their goods was obviously largely driven by business motivation, while the customer preferences to which traders respond could largely be driven by their support for bitcoin on idealistic grounds.
As digital currencies are increasingly accepted, we will soon be able to see a milestone in terms of the adoption of major digital currencies.
Cryptocurrency and blockchain technology are a key pillar of content for Vulcan Post, and we will continue to monitor developments in this area. You can follow our reporting here.
Credits for featured images: Geoff Pugh via Telegraph