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Last year, the payment giant PayPal Holdings processed 15.4 billion payments with a value of $936 billion and had the newest product launches in its history. Last year in October, PayPal launched its crypto services, and this year it extended the service to its merchant network. This month it added support on Venmo, which has seen massive demand. “Demand on the crypto side has been multiple-fold to what we initially expected. There’s a lot of excitement,” PayPal CEO Dan Schulman said in an interview with TIMES. Schulman shared that they have actually been looking at digital forms of currency and DLT for six years or so. At the time, it was early, and cryptos were more assets than currency. As the current trend of digital payments continues to grow at an accelerating rate, Schulman expects there to be six to ten super-apps that will basically intermediate other apps and will have all of the user’s data and information in one place to make it simpler and easier for them. This means cash is no longer the king; even credit cards will go away. He said,
“Ten years from now, you will see a tremendous decline in the use of cash. All form factors of payment will collapse into the mobile phone.”When this happens, then central banks will need to rethink monetary policy as well, so “this is the advent of digital currencies.” The paper currency wouldn’t fit the bill as no one is using them. Here, Schulman explains how the Central bank-issued digital currencies (CBDC) are basically digitizing a fiat currency like the U.S. dollar. He said,
“A digital dollar would be fully backed by the U.S. government, but done in a digital fashion, and that might allow the government to open up Fed funding to other institutions besides banks, potentially companies like PayPal, where you could fund straight from the Fed right into a digital wallet.”This will modernize the inefficient financial system, which he said, is too time-consuming and too expensive right now.