Digital payment company PayPal is not betting on bitcoin as of now. In an interview with TheStreet.com, PayPal chief executive officer Dan Schulman said that while PayPal is focused on innovating in the payment market, it’s not focused specifically on the digital currency.
“I think right now, and we’re seeing this maybe more than ever, the volatility of the cryptocurrency makes it actually unsuitable to be a real currency that retailers can accept,” Schulman said in the interview. “[That’s] because retailers have very narrow margins, and when you have a bitcoin bouncing up and down by 15 percent over a couple weeks period, that can be the difference between profits and losing money on every sale.”
While Schulman is skeptical about bitcoin, he did says blockchain technology is a “real breakthrough” for any technologies that are founded on distributed trust. PayPal has a lot of room to innovate with blockchain technology.
“I think you need to separate out the bitcoin or cryptocurrencies as currencies and the underlying protocol called blockchain,” he said.
The executive also noted that blockchain isn’t being viewed as a competition to PayPal or to other financial services firms, but rather as a technology that enabled innovation to be created on top of it.
Schulman’s comments come at a time when bitcoin is garnering a lot of attention on the part of investors, something that has sent its value skyrocketing. The cryptocurrency began 2017 at approximately $1,000 per coin and was recently valued at $14,800 per coin.
The fact that the virtual currency is unregulated and extremely volatile has led regulators around the globe to warn about the risks associated with investing in bitcoin. China and South Korea have banned bitcoin exchanges and initial coin offerings (ICOs) altogether. Meanwhile, JPMorgan Chase chief executive Jamie Dimon called bitcoin a “fraud” last year and said he would fire any trader who traded in it.