- Regulation will be critical for cryptocurrency adoption, PayPal CEO says
- Underserved communities are most likely to benefit from the development of blockchain technology
The future of our financial system is being redesigned in front of our eyes, PayPal CEO Dan Schulman said at CoinDesk’s Consensus 2022. Rethinking the underlying rails of the existing financial system by taking out intermediaries, so that money can be moved faster and cheaper, has the potential to provide a more inclusive future.
The multinational online payments platform recently enabled its customers to transfer cryptocurrencies from its app to external wallets and exchanges.
“We built a bridge between the fiat universe and the crypto universe,” said Jose Fernandez da Ponte, the company’s general manager for blockchain, crypto and digital currencies. Consumers will now have access to the wider Web3 network through their PayPal wallets, Fernandez da Ponte said at the conference.
Addressing the volatility of cryptocurrencies
Cryptocurrency is more volatile than many mainstream markets, and consequently, some fund managers have urged consumers to not invest in cryptocurrencies.
Schulman says the key to managing market volatility is to have regulators protecting consumers. “Doing responsible innovation with the blessing of regulators is extremely important,” Schulman said. “You may not want it to be that way, but it has to be that way in order to evolve.”
Many people who sit outside the existing financial system or are underserved by the financial system are likely to benefit from money being moved on blockchain rails, Schulman said. Although Schulman believes that PayPal is not yet serving these communities, he is optimistic that it will.
“We are playing the long game, but you’re going to start seeing some significant changes over the next five years.”
Fernandez da Ponte says he is most excited about three things in the coming years: NFTs, stablecoins and digital identity.
As NFTs (non-fungible tokens) move to become a digital property right, they will gain a significant number of use cases, Fernandez da Ponte said. “Now I have a way to prove that I own something on-chain, that is a very significant development that we will see in the future.”
In the case of stablecoins, he believes merchants desiring large-scale sales operations must be willing to use digital currency — stablecoins could provide reliability for these future transactions. “I think we are close to having stablecoins at scale.”
Finally, digital identity will be critical to “prove who you are.” Despite the “really great work being done by the community, that one is probably a little bit further out,” Fernandez da Ponte said.