Paypal publishes an open letter: Why did we choose to embrace Crypto?

Original Title: Pay How You Want

Original Author: PYUSD

Original Compilation: Deep Tide TechFlow

Money, Payments, and Freedom

Money is not powerful when it accumulates; money is powerful when it flows.

Every day, billions of transactions occur around the world, and payments are the most tangible and frequent use of currency. However, payments are not just a means of value exchange; they are a story about the freedom to progress.

Every transaction we make—from buying coffee to transferring funds overseas—is a reflection of our financial autonomy. On the other hand, the inability to pay in the way we want limits our ability to create, share, and utilize value on our own terms.

PayPal emerged at a critical juncture in the history of payments. From the early days of e-commerce, we positioned ourselves as a beacon of trust, providing users with the confidence to transact in a powerful yet challenging new ecosystem. Now, more than a decade after the advent of blockchain technology, PayPal is once again facing new challenges at a pivotal moment in payment history. Just as we took payments online, we are now taking payments on-chain.

Our commitment throughout our tenure has remained unchanged: to foster payment innovation that allows everyone to pay the way they want.

The Digital Payment Revolution

The latest structural shift in payments has emerged with the internet.

As vast amounts of information have moved online, the mechanisms for tracking and managing funds have also migrated—from account balances and transaction histories to broader business activities. This thriving e-commerce ecosystem has set new expectations for how transactions are conducted.

The current demand has evolved into a desire for the same immediacy and borderless payments that people seek in their everyday online interactions.

This digital transformation highlights the emerging gap. While the internet has provided the infrastructure for global commerce, there is a clear lack of trustworthy and efficient online payment systems. People are looking for a platform that is not only secure but also fast and intuitive. Businesses need a reliable platform that resonates with an ever-growing online customer base.

PayPal bridges the gap between the new digital financial rails and consumers' urgent need for trust and accessibility. We have built an ecosystem that fulfills the desire for people to pay the way they want by providing flexible and secure global payments.

Today, PayPal has over 40 million active accounts, demonstrating that our success is not just a result of identifying market gaps.

This is about our unwavering commitment to making payments easier. For decades, as the internet has evolved and other fintech tools have emerged, our focus has remained unchanged. From facilitating early eBay transactions to acquiring Venmo in 2013, our trajectory has been defined by one question: How do people want to pay?

We have spent decades answering this question. At the highest level, the answer remains quite simple: People want fast, cheap global payments. Over the past thirty years, the solutions have still not achieved the best outcomes.

The New Gap: PayPal, Cryptocurrency, and New Financial Rails

While the digital payments space has been striving to provide global, instant, and seamless transactions, the reality often reveals shortcomings.

So far, payment innovations have been built on the same foundational financial rails that arose with the internet. In practice, "instant" settlement and "24/7" service are often conveniences achieved through services that accept (or transfer) risk.

The settlement times for online payments remain lengthy (averaging 2-3 days in the U.S.). Markets, banks, and services maintain working hours, further extending settlement times. Employers struggle to pay an increasingly distributed workforce. A globally mobile population finds it difficult to remit funds across borders in a cheap and fast manner. Businesses feel this friction most acutely, while consumers still face long settlement times in certain payment environments that they believe should be quick.

In short, people today may not be able to pay the way they want.

So, why are we turning our attention to Crypto? The answer is: It is practical.

Cryptocurrency brings us closer to people's desires: fast, cheap global payments. And, as we mentioned earlier, we are in the payments business.

Blockchain is the new financial rail—a new payment rail. Blockchain technology disrupts the external and actual workings of payments. For customers and businesses, settlement times are nearly instantaneous—anytime, anywhere.

This should not be underestimated; blockchain technology is the only technology that offers a completely new way to pay. While it may seem like a trend to some, for PayPal, blockchain makes sense.

If there is a payment tool that can provide around-the-clock, near-instant, and cost-effective transactions, then exploring that solution is a practical choice. This is not about following trends; it is about whether we can identify and adopt an alternative, potentially better payment financial technology.

Once again, PayPal finds itself with the opportunity to bridge the gap between new payment rails and their widespread adoption and trust. We have 40 million accounts that can be better served through additional options for blockchain-based payment solutions. Just as we did in the early days of e-commerce, PayPal is once again moving toward a singular goal: to let you pay the way you want.

PayPal, Payments, and PYUSD

In 2020, we allowed PayPal and Venmo users to buy, hold, and sell cryptocurrency within their accounts. Last year, users could start transferring the crypto assets they purchased in their accounts to external wallets, including decentralized wallets.

We envision PayPal and Venmo continuing to serve as key hubs for commerce, acting as the primary channels for businesses and individuals to transact goods and services. By allowing the transfer of crypto assets between PayPal and Venmo accounts, we better connect the worlds of DeFi and CeFi through a platform that excels at facilitating payments.

Our broad view of blockchain and cryptocurrency is neutral—that is, we have no ideological preference in this race.

We know that customers still want easier, faster, and cheaper payments; we know that blockchain enables these types of payments in a way that today’s internet financial rails do not; we believe that customers should choose to adopt new solutions to meet their potential needs.

However, we do have a subjective stance on stablecoins. We believe they are a necessary tool for fully realizing the potential of cryptocurrency as an accessible and flexible payment tool. PYUSD, issued by Paxos, represents our stance in the stablecoin space. This is our commitment to our customers. We are doing what we have been doing since 1998: providing our customers with what they want.

What our customers want is easier payments. Businesses want to pay suppliers without worrying about settlement times. Individuals want to send remittances to family without incurring high fees and waiting days. Today's financial infrastructure fails to meet customers' needs for fast transactions, and we do not want our customers to lose value in that wait.

Today, blockchain technology is the only innovation that provides a completely new payment rail that helps meet customer needs. We have always been committed to being a pioneer in one aspect: consistently providing our customers with what they want and deserve—trust, confidence, and ease. PYUSD is just the next evolution toward that goal.

Pay the Way You Want

At PayPal, we have always believed that the essence of currency lies in its flow, and the rapid, cheap, and global flow of funds is what our customers seek. The history of PayPal is a story of this steadfast commitment: enabling individuals and businesses to transact on their own terms. We believe that cryptocurrency creates a new paradigm that helps achieve payment goals across the globe.

In other words, we think it is simple: Paying with cryptocurrency means paying the way you want.