PayPal Unveils First Real Blockchain Foray
The ‘blockchain, not crypto’ conundrum continued on Tuesday, with PayPal revealing that it had made an investment into the decentralized ledger space after its CEO bashed Bitcoin and digital assets at Davos.
According to CoinDesk, Silicon Valley fintech giant PayPal has recently completed its first investment into a blockchain firm. The deal saw the firm invest an undisclosed sum in Cambridge Blockchain’s Series A extension round, which seemingly raised $3.5 million according to SEC filings. Cambridge Blockchain, which is also backed by crypto industry conglomerate Digital Currency Group, the Apple-affiliated Foxconn, and HCM Capital, is an upstart that allows institutions to transfer sensitive data through ledgers.
On the matter of why PayPal made such an investment, which is relatively small considering its lofty $100b+ market capitalization, a representative explained that it believes “applying blockchain for digital identity” is something that can be a benefit for financial services firms, like PayPal. But this deal might have been a long time coming. Cambridge’s CEO, Matthew Commons, tells Forbes that he worked hand-in-hand with the American powerhouse in 2018 in an accelerator format, in which the crypto-friendly startup expressed its vision about a world where “users have a lot more direct control over their personal data.”
This comes after Facebook’s Mark Zuckerberg mentioned ledger technologies in a recent interview in the context of online identities and data sharing, a seeming hot topic in the blockchain sphere.
PayPal’s CEO (And Former CEO) Wary Of Crypto
As explained earlier, this move only perpetuates the ‘blockchain, not crypto’ dilemma that has raged since Bitcoin became a mainstream topic. More specifically, PayPal’s current CEO and former CEO have both overtly bashed Bitcoin, but here the firm is making this investment.
At Davos, PayPal CEO Dan Schulman, expressed skepticism towards cryptocurrencies, but optimism towards blockchain technologies (what a surprise). Schulman noted that crypto is “more of a rewards system for implementing blockchain,” rather than a currency or Store of Value (SoV) system in and of itself. The PayPal chief added that he’s seen scant retailers adopt this form of exchange, even as infrastructure has bolstered.
On CNBC “Fast Money” last year, Bill Harris, a former PayPal C-suite head who notoriously called Bitcoin “the greatest scam in history,” further bashed the cryptocurrency. Harris opened up his segment on CNBC Fast Money by first calling the community surrounding crypto a “cult” and then slamming down the features that make Bitcoin, well… Bitcoin. Only adding to his unpopular opinion, he stated:
“The ‘cult’ of Bitcoin make many claims — that it’s instant, free, scalable, efficient, secure, globally accepted and useful. It is none of those things.”
Of course, Harris’ statements mean nothing to PayPal, but the fact that a forward-thinking fintech firm like PayPal is willing to accept blockchain but not cryptocurrencies is beyond many investors.
Photo by Aidan Bartos on Unsplash
