PayPal CEO: Smart Contracts, DeFi Apps Part of Company’s Crypto Plans

PayPal is set to expand its crypto capabilities and is mulling how it can help shape a new financial system, which the firm’s CEO said includes central bank digital currencies (CBDCs) and smart contracts.

Dan Schulman, president and CEO of the payment systems giant, revealed during PayPal’s earnings call on Wednesday that it is ramping up its new consumer wallet “super app” in the US over the next few months. In addition to features such as high-yield savings and early access to direct deposit funds, the app will offer additional crypto capabilities, he said.

PayPal is currently working on transfers to third-party wallets and creating a seamless process for taxes and tax reporting, Schulman added. The company is looking at how it can integrate that into trading and buying crypto on its platform.

Schulman also noted that the company hopes to launch crypto trading in the UK next month. 

Michael Del Grosso, analyst at Compass Point Research, said in a research note he believes the company’s product enhancement and new services, such as PayPal’s crypto capabilities, have enhanced its consumer and merchant presence. 

“We expect continued traction from several of its new initiatives and product releases over the last 12 months, and some of which are forthcoming,” he wrote.

PayPal first revealed in October its new service enabling customers to buy, hold and sell cryptocurrency directly from their account. It announced earlier this month that it raised the purchase limits of cryptocurrency for eligible customers in the US to $100,000 per week with no annual purchase limit.

“All of that is interesting, but it isn’t the main course in terms of what we are trying to do with our blockchain and digital currency business unit,” the CEO said. “We are clearly thinking about what the next generation of the financial system looks like, how we can help shape that.”

PayPal is working with regulatory agencies and central banks across the world, as Schulman said the number of countries looking into CBDCs has increased from about 40 to 100 over the last year or so. Governments are showing increased interest in creating a more efficient system using new technology to bring more people into the financial system, he added.

“How can we use smart contracts more efficiently?” Schulman said. “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.”

A PayPal spokesperson declined to comment further on specific crypto capabilities and DeFi applications it is working on.

PayPal is looking to continue building its team to “shape the thought process around this,” Schulman added.

The firm is seeking a global crypto and digital currency operations manager to be based in New York, according to a July 12 job posting. The manager would work with PayPal’s Treasury team, as well as its Blockchain, Crypto, and Digital Currency unit as PayPal moves into cryptographically secured digital currencies and expands its offerings and roadmap, the listing states.

Separate listings show that PayPal is also looking to hire crypto risk managers and investigators; legal directors to work on crypto and regulatory business initiatives; and senior managers of cryptocurrency product; and cryptocurrency technology strategy enablement program managers, among other roles.

The talent search comes after rival Visa recently announced a swath of promotions and additions to help advance the adoption and use of bitcoin, stablecoins, NFTs, DeFi and public blockchain networks. 

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