PayPal has offered to distribute central bank digital currencies (CBDCs) to the masses using its digital wallets
PayPal’s CEO has suggested that the payment company wants to help central banks distribute their CBDCs using its digital wallet. Dan Schulman suggested that the payment company could play the role private banks play in distributing the physical dollars.
Schulman made this statement during its investor day yesterday, suggesting that central banks can use PayPal’s digital wallets to distribute their CBDCs to consumers on varying levels. Several apex banks globally are developing their CBDCs or researching on how to develop and deploy one.
After CBDC’s development, a key problem would be its distribution to consumers, which is where PayPal wants to come in. Schulman said the number of digital wallets PayPal will have over the next few years would put it in a perfect position to help central banks and governments to distribute the digital currencies.
Most central banks have admitted that it would take a while before developing and issuing CBDCs as they are still researching the pros and cons of issuing digital currencies. Christine Lagarde, the head of the European Central Bank, admitted that the digital Euro could take years to accomplish since this is uncharted territory. The Federal Reserve is still in the research phase of a possible digital dollar, which means it would take a few years to accomplish.
At the company’s Q4 2020 earnings call earlier this month, Schulman revealed the current financial system convinced PayPal to create a new unit focused on blockchain and the digital economy. He made the same statement during the investors’ day yesterday.
Schulman said, “As we move to a modern tech—it could be distributed ledger technology, it could be other tech—we will see a shift in how digital forms of value will be moved around the world“.
PayPal wants to enter smart contracts
PayPal intends to add utility to the existing assets. The company intends to enter the smart contracts market and tokenisation of other non-crypto assets. Schulman said they had been presented with a once in a multi-decade opportunity to redefine the system’s fundamental rails.
During the event, PayPal revealed customers using cryptocurrency services were up 12% over the past week.