The week in review: PayPal’s crypto offering elicits mixed responses
What a wild week it’s been – bitcoin breached $13,000, PayPal’s announced it’s to set start supporting crypto on its platform, and the BTC community rallied to support Nigerians in the #EndSARS protests. And more. Are you breathless? We’re breathless.
Catch up on this week’s top stories.
PayPal launches bitcoin offering
News broke yesterday morning that PayPal will start allowing users to buy bitcoin via its app and website.
Many are calling it a decisive moment for bitcoin adoption. PayPal has more than 300 million users across the world and the move makes accepting bitcoin a reality for thousands of retailers. The crypto markets have responded accordingly, with the price of bitcoin hitting highs over $13,000 in the immediate aftermath.
PayPal chief exec Dan Schulman was bullish about its potential impact and his hopes for crypto. He told Reuters the company hopes this will “encourage global use of virtual coins,” and prepare its network for the influx of digital currencies being explored by central banks.
The move will see PayPal allow US-based-users to buy, sell and hold bitcoin, Bitcoin Cash, Ethereum and Litecoin on its platform. However, there are notably absent features. For one, users will be unable to transfer crypto in their accounts to other accounts on or off Paypal – a strong prerequisite for an asset you supposedly own. In other words, once you buy the coins, they stay in your account until you sell.
OK, we can forget this Paypal “news”.
“Crypto in [the Paypal] account cannot be transferred to other accounts on or off PayPal.”
So, this is all a big PayPal nothing burger, just entries in a central PayPal database, nothing to do with #bitcoin pic.twitter.com/cHGQIEdHaL
— PlanB (@100trillionUSD) October 21, 2020
Essentially, for now, Paypal’s offering is bitcoin without the bitcoin. Casa CTO Jameson Lopp compared it to offering IOUs as opposed to actual bitcoin.
Never mind; they’re only issuing IOUs. Wouldn’t want folks withdrawing to a censorship resistant wallet, after all! https://t.co/21f0sQh5cX
— Jameson Lopp (@lopp) October 21, 2020
Ripple CEO, Brad Garlinghouse echoed these thoughts, saying it was “great to see a payment pioneer leaning in,” but that it was “disappointing some fundamental tenets/benefits of crypto are spurned.”
2 steps forward, 1 step back…Great to see a payment pioneer leaning in, BUT disappointing some fundamental tenets / benefits of crypto are spurned. I suspect PayPal is concerned about the (wait for it…) regulatory uncertainty, impacting its roll-out on a number of levels. https://t.co/aPVv85jrNR
— Brad Garlinghouse (@bgarlinghouse) October 21, 2020
If Garlinghouse and others like Dan Held and Adam Back are correct in their assumptions, it could just be that PayPal is exercising caution and plans to allow users to actually use their bitcoin for payments in the future.
Either way, the news is certainly bullish for bitcoin. What do you make of it? Let us know on Twitter.
Bahamas and South Korea make CBDC moves
The Central Bank of the Bahamas (CBOB) announced on Tuesday that it’s launched its new digital fiat currency sand dollar.
The sand dollar is a digital version of the Bahamian dollar, forming part of the bank’s ongoing efforts to implement digital payments system infrastructure to its current offering.
It will be used to improve access to regulated payments and financial services for “under-serviced communities and socioeconomic groups”. Additionally, it hopes to decrease service delivery costs and increase the efficiency of transactions throughout the nation.
The bank announced last week that the sand dollar will not be limited to only local transactions. “At the moment, it is currently only used in a domestic setting, but eventually we are working on a solution that will make it interoperable with other global currencies,” CBOB assistant manager of electronic solutions Bobby Chen told the Nassau Guardian.
There was more central bank digital currency (CBDC) news from South Korea. A consortium led by EY Hanyoung, the “Big Four” consulting giant’s South Korean subsidiary, has bid for the country’s CBDC pilot project.
EY Hanyoung, with Samsung SDS and Japanese tech giant LINE (owned by South Korea’s Naver Corporation), is looking to work on the technical design of the project.
The Bank of Korea recently sought bids for the project and apparently only received one from EY. The central bank is conducting another bid until 29 October, but will evaluate the EY consortium for it if no other parties come forward.
If they get it, EY Hanyoung will lead the CBDC’s design process, with Samsung SDS and LINE providing system architecture support.
The Bank of Korea launched its CBDC pilot program in April this year and it’s expected to run until December 2021.
USDC ahead of Tether amid stablecoin boom
USDC, the US dollar-pegged stablecoin run by crypto exchange Coinbase and payments platform Circle, announced Solanba as its fourth “official” blockchain after Ethereum, Algorand and Stellar.
Following the announcement, USDC’s market cap saw a sharp boost by $53 million to $2.791 billion, according to metrics site CoinMarketCap.
USDC is now the 13th largest by market cap and traded $556 million in the past 24 hours. At this rate, its growth now exceeds that of its primary competitor Tether (USDT), even if Tether’s overall market cap is far larger.
USDC has blossomed this year, starting with a market cap of $473 million and hitting $700 million by April. But the DeFi craze also had a part to play – around the end of June, many lending protocols offered customers the chance to make enormous returns from staking USDC in their smart contracts.
At the same time, Tether (USDT)’s market cap has more than doubled since May from $7 billion to $15 billion today, meaning USDC is growing faster than Tether but that USDT still dominates the market.
With the launch of another blockchain, could USDC be in a position to overtake USDT? Let us know what you think on Twitter.
Nigeria’s #EndSARS protests shine a light on BTC adoption
Protests erupted across Nigeria earlier this month and with multiple regions placed under curfew, as well as the freezing of protest groups’ bank accounts, activists have taken to social media and bitcoin in their fight against police corruption.
Nigerians called for the disbandment of the special anti-robbery squad (SARS) in 2017 following excessive use of violence and intimidation to innocent citizens. Despite a government response indicating they’d complied, reports emerged of SARS officers allegedly killing a young boy on 3 October 2020.
Local activist groups, such as the Feminist Coalition, had already started raising funds in multiple fiat currencies to sustain the protests, but within days, the coalition’s bank accounts were frozen. Shortly thereafter, they asked donors to send funds via bitcoin wallets. As of 18 October, the group had raised more than 7.2 bitcoin (or $82,000), making up 44% of the total funds raised for the movement.
The decentralised and permissionless nature of bitcoin is vitally important in times like this and it’s encouraging to see such a positive level of adoption in this particular case. Our thoughts are with Nigerians during this troubling time.