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PayPal’s CFO John Rainey stated that while his company was definitely working to create a blockchain/ cryptocurrency framework to facilitate its payments in a more streamlined manner, he still wasn’t sure about Bitcoin’s overall scalability potential.
Recently PayPal CFO John Rainey said something about PayPal’s crypto plans that revived the whole story about “PayPal Mafia” in general. While Rainey said that he doesn’t think that Bitcoin is mainstream enough to be a big focus for them claiming that PayPal added Bitcoin to the list of their payment options for merchants years ago, another group has organized themselves being more crypto-proactive.
What Rainey actually said was that due to the immense level of volatility in the crypto market, retail businesses would instantly convert Bitcoin to stable fiat currencies so, there isn’t a whole lot of interest in crypto.
“We have teams clearly working on blockchain and cryptocurrency as well, and we want to take part in that in whatever form that takes in the future — I just think it’s a little early on right now on bitcoin”.
According to Amsterdam Stock Exchange trader who goes by Crypto Michael, Bitcoin is up to 80 times cheaper than PayPal. This is especially when making cross-border payments of large amounts.
Transfering abroad $100,000 in $BTC through the Blockchain: fees of $5-50.
Transfering abroad $100,000 of value through Paypal: fees of $1,500-4,000 + PayPal is able to lock the amount for some period
— Michaël van de Poppe (@CryptoMichNL) May 4, 2019
However, back in 2002, Paypal CEO Peter Thiel said the sentence that would clear the road to the Paypal as we know it today.
“We seek to become the global standard for online payments.”
Thiel hasn’t been Paypal’s CEO for a while now, but his vision appears to be intact at Facebook, where he was an early investor and has long served on the board of directors.
We already wrote about how Facebook has been developing a virtual currency based on blockchain technology that could be used by WhatsApp users to send payments to one another.
According to Bloomberg, this stablecoin could be announced already in the next quarter. The new currency will be reportedly be tested in India to start with, as Facebook believes that market offers a good opportunity.
Mini “Paypal Mafia” Running the Crypto Ecosystem
However, several of the executives spearheading the Facebook project seems to be ex-PayPal employees, including leader David Marcus, who was the company’s president from 2012 to 2014.
Marcus quickly hired some PayPal veterans to work with him at the new Facebook group. One of his first employee who joined him at Facebook Messenger, was marketing leader Christina Smedley, who was vice president of global brand and communications at Paypal. She also worked as a PR both fro Amazon.com and Edelman so it probably won’t be a problem for her to convince Facebook users to trust the network with their finances.
Moreover, we have Tomer Barel, who was among executives monitoring risk and fraud at PayPal. There is also John Muller, who worked both at PayPal and EBay Inc. for almost 20 years and will now work as Facebook group’s general counsel.
The term “PayPal Mafia” was made in the mid-2000s to describe the later feats of PayPal’s early team, whose members include now-tech visionaries like Elon Musk, Reid Hoffman and Peter Thiel. However, here are included some not so publicly known but also very important names including Meron Colbeci, who worked with Marcus at PayPal as the group’s director of product, and Nate Gonzalez, who worked at PayPal on global peer-to-peer payments.
Facebook declined to comment on the project or Thiel’s influence, saying:
“Like many other companies Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
Paypal, on the other hand, is fresh off taking a $500 million stake in Uber ahead of an anticipated IPO this week. Rainey said PayPal made the investment because of the desire by the two companies to develop a payments platform together. Also, PayPal became Facebook’s Instagram payments provider.
Meanwhile, Rainey said PayPal remains on the hunt for acquisitions globally this year. With the company projected by some on Wall Street to generate $3 billion in free cash flow in 2019, PayPal’s two-year acquisition spree is likely to continue..