PayPal CEO Dan Schulman said digital currencies are set to go mainstream as more merchants take a “digital first” approach to payments, which means cash is on the way out.
“The entire world is going to come into digital first,” Schulman said at the Web Summit conference on Wednesday. Merchants are moving to accept payments via smartphones and QR codes, and more customers have started to use digital wallets, which “are natural complements to digital currencies.” He added,
“So, over the long run, I’m very bullish on digital currencies of all kinds.”
These remarks came after the popular payment company announced support for cryptos just last month. PayPal is also planning to use digital currencies to shop at 26 million merchants on its network next year.
According to a recent survey by Mizuho, one-fifth of PayPal users have already traded Bitcoin on the app.
Bitcoin’s ongoing exuberance boosts user engagement, with BTC traders reporting over three times higher usage frequency than non-BTC traders. However, converting these non-BTC traders into crypto users is a challenge because only 8% say they plan to trade Bitcoin in the future on the PayPal app.
Schulman also sees China’s largest mobile-payment company Ant Financial as its biggest competitor who had “tremendous success” in the country with a digital wallet with “all elements of financial services, all elements of shopping,” Shulman said.
Drop the Cash
During the conference, Schuman said PayPal’s most significant opportunity is to move toward digital payments and away from cash. The trend that has already been happening is “accelerating” in the pandemic, and “you’re seeing an explosion in digital payments,” he said.
The USD Index has been on a decline ever since March, currently at a level not seen since April 2018 as “Treasury Secretary Steven Mnuchin, and Federal Reserve Chair Jerome Powell are once again on Capitol Hill begging Congress for some money.”
Meanwhile, Bitcoin has made a new all-time high, currently trading above $19,000.
According to analyst Mati Greenspan, currently, we are having a very similar setup playing out that we saw just before BTC broke through $14,000. He noted,
“The pattern resulted in an extremely rare upward breakout of an upward facing channel, despite a coinciding psychological barrier.”
While the natural thing for the market to do is have a pullback and test the lows before going for ATH, we are not in a “normal market right now,” and “the question isn’t really when we break $20,000 so much as how it will break,” said Greenspan.