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 that private banks play in distributing the physical dollars.
Schulman made that statement yesterday on his Investor Day, suggesting that central banks could use PayPal’s digital wallets to distribute their CBDCs to consumers at various levels. Several Apex banks around the world are developing their CBDCs or are researching how to develop and deploy one.
After the development of CBDC, a major problem would be distribution to consumers. This is where PayPal wants to come into play. Schulman said the number of digital wallets PayPal will have over the next few years would put it in the perfect position to help central banks and governments distribute the digital currencies.
Most central banks have admitted that it would take a while for CBDCs to be developed and issued as they are still exploring the pros and cons of issuing digital currencies. Christine Lagarde, the head of the European Central Bank, admitted that it could be years before the digital euro is reached as this is new territory. The Federal Reserve is still in the research phase of a possible digital dollar, which means it would take a few years to complete.
In the company’s fourth quarter 2020 earnings statement earlier this month, Schulman announced that the current financial system has convinced PayPal to create a new entity focused on blockchain and the digital economy. He made the same statement yesterday on Investor Day.
Schulman said: “If we move to a modern technology – it could be distributed ledger technology, it could be a different technology – we will see a shift in the way digital forms of value move around the world“.
PayPal wants to enter into smart contracts
PayPal intends to add value to the existing assets. The company intends to enter the smart contract market and tag other non-crypto assets. Schulman said they had the opportunity to redefine the system’s basic rails once in a decade.
During the event, PayPal announced that customers using cryptocurrency services had increased 12% over the past week.