PayPal CEO Dan Schulman said on Thursday that he sees PayPal playing a significant role in the usefulness of central bank digital currencies (CBDCs).
On the day of the company’s investor, Schulman said that PayPal is preparing to be “the digital wallet for global CBDCs”.
PayPal’s newly revealed product roadmap for encryption includes becoming a CBDC platform. Schulman said he sees PayPal’s digital wallets becoming the way central banks distribute tokens to consumers.
“PayPal is a perfect complement for central banks and the government to distribute these CBDCs in a modern way so that more people can access the digital economy, and we think it is an area of focus for this new business unit we created.”
Still, some central banks are a long way from issuing a CBDC. European Central Bank President Christine Lagarde said that a digital euro could take years to complete, and the Federal Reserve is still in the research phase for a possible digital dollar. In the meantime, Schulman said PayPal is looking to add utility to existing assets.
PayPal unveiled its product roadmap earlier this month on its fourth quarter 2020 conference call. During this call, Schulman called the current financial system “old fashioned”, prompting PayPal to build a new unit focused on blockchain and the economy digital. Schulman reiterated these sentiments in today’s conference call.
“As we move to modern technology – it can be distributed accounting technology, it can be another technology – we will see a change in the way digital forms of value are moved around the world,” he said.
And PayPal is planning to take a closer look at these other digital forms of value. Schulman’s comments suggested broader aspirations than just the distribution of CBDC. “Step 1” in the product roadmap is to enable cryptography as a financing instrument on PayPal, but Schulman also indicated that PayPal is looking to digitize other assets through the use of smart contracts and tokenization.
“If you think of any usefulness in the blockchain … you talk about digitizing assets … that can be broken down into smaller parts. That is clearly what we are looking at and we have in our roadmap,” he said.
Part of creating utility in the present is thinking about the long term and what a new financial system might look like, according to Schulman.
“This is a unique opportunity in several decades … where the fundamental tracks are redesigned and we have the opportunity to reshape that,” said Schulman.
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