PayPal’s ‘ultimate goal’ is to weave crypto and traditional payments

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It’s hard to deny that crypto is having a moment, especially when the President of the United States posts about crypto on a Sunday morning. 

While that’s currently the bullish force pushing us forward to start the week — after a less than stellar time last week — it’s hard to say whether the positive momentum is enough to last. 

Here’s the good thing though: We don’t necessarily need to just rely on posts from world leaders to legitimize the space, we’re seeing that happen in a myriad of ways.

Take PayPal, for example.

“I think that the ultimate goal is that whatever you see a way to move money around, on the PayPal side, you should have an option to do that with digital currencies,” PayPal’s Jose Fernandez da Ponte told me.

He thinks that this is the year overlap between crypto and traditional payments becomes a bigger focus. Clearly, stablecoins are the “killer application of blockchains for payments” right now, he noted. The sector has a market cap of $220 billion, according to rwa.xyz.

PYUSD, PayPal’s stablecoin offering, has a market cap of roughly $760 million which puts it in the top 10 stablecoins, but it’s nowhere near Circle and Tether — the two whales in the space.

For da Ponte though, market share isn’t the main focus. 

“I think that the obsession with market cap is because that’s an artifact of how stable coins get monetized. Today, a lot of the large issuers basically make money out of the deal done on the reserves. We think that over time, that’s going to be less relevant, that monetization will move away from interest rates and more toward transaction fees, and that stablecoins are going to be monetized by consumer flows,” he explained. 

Now that doesn’t mean that they don’t want PYUSD to grow, da Ponte clarified, adding “we want to be bigger than we are today.” But rather than obsess over market cap, da Ponte and his team are focused on chain transfer volume. 

What’s interesting is that da Ponte thinks we’re going to see more of what he calls a “stablecoin sandwich,” which is “fiat on one side, and then the stablecoin as a sort of settlement layer and then you see fiat on the other side.”

“We have seen that in our own remittance flows. So when we are settling with partners in the Philippines and other markets in stablecoins these days, the consumer sees fiat, the sender sees fiat, the receiver sees fiat, and we are capturing the advantages of stablecoins on the infrastructure side.”

Obviously, being the payments giant it is, PayPal has to straddle the line of being focused on both fiat and digital currencies and allowing for the customers to have that choice when interacting on the platform. 

Full disclosure: I did ask if PayPal would consider a yield-bearing stablecoin offering if the conditions were right. Da Ponte was a good sport about it, telling me that it’s “difficult to talk about hypotheticals,” but they haven’t really considered it. That doesn’t mean it’s totally off or on the table — just not on the radar of the payments giant at this time. 

The way da Ponte explained PayPal’s focus is simple: Weave traditional payments seamlessly with crypto. But more than that, make it effortless for non-crypto native folks and crypto natives alike. 

And that’s the kind of adoption we need.

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