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Hello there! Eric here.
PayPal is further dividing the crypto landscape — and that’s a good thing.
That’s the upshot from the conversations I’ve had this week after the $67 billion giant announced plans to let people pay small businesses in crypto.
Users will be able to make international payments using over 100 different cryptocurrencies, a range that spans recognised assets like Bitcoin to, eh, less established ones like Fartcoin.
“Businesses are facing more pressure than ever in today’s environment, and this is one way we’re helping them win,” a PayPal spokesperson told me.
It’s another addition to PayPal’s menagerie of crypto services, which already includes trading and its PYUSD stablecoin, which achieved a $1 billion market cap this week, according to DefiLlama.
It’s also, more pointedly, a sign of intensifying encroachment on crypto players’ territory by fintech firms like PayPal, Stripe and Robinhood.
Not only do these established firms enjoy outsized market share, but they also have a formidable lobbying presence.
Indeed, fintech firms seemingly hold all the cards. They have already established relationships with merchants, retail investors and regulators.
“Their entry into crypto markets presents significant risks to native crypto firms,” Richard Baker, CEO of Tokenovate, the financial markets infrastructure startup, told me.
Native crypto firms will have to catch up to avoid losing out.
Yet, with a hint of the radical optimism that personifies tech entrepreneurs everywhere, the people I’ve spoken with don’t see this competition as a winner-take-all game.
Yes, big businesses have advantages. That doesn’t mean that all crypto trades will now be funnelled through old financial rails, Dat Ngo, an accountant at Vetted Prop Firms, which helps vet trading firms for investors, tells me.
Fintechs drilling into crypto will create an on-ramp for normies with little experience of digital assets, while native projects will keep catering to degens, he says.
The mantras of self-custody and permissionless finance remain “available to anyone who wants sovereignty and is willing to manage keys and volatility,” Ngo said.
Others point out that the likes of PayPal are also likely to drive volume through exchanges and wallet providers, creating more business.
That’s a win-win situation, then.
Crypto lender Abra pauses withdrawals as dozens of customers fear their funds are gone
Customers at Abra, a crypto lender which claims to manage more than $700 million, are raising the alarm after the platform told some users that it has paused withdrawals, Tim Craig reported.
Roman Storm prosecutors attack privacy ‘distraction’ in closing arguments
Federal prosecutors told jurors that privacy was a mere “cover story” and a “distraction” during their closing argument in the criminal trial of Tornado Cash co-founder Roman Storm, Aleks Gilbert reported.
Bo Hines had plenty to say about the booming stablecoin industry and evolving market structure for cryptocurrencies during his latest podcast appearance, Kyle Baird reports. But when it came to how much Bitcoin the US government actually holds, the White House Crypto Council executive director clammed up.
Crypto markets are down 2% over the past week.
