With the cryptocurrency markets dropping ever lower, many are exiting the space. However, PayPal is one of those looking towards digital currencies, even though private ones, beginning with a reward platform for its staff.
The company has released an internal private blockchain-based platform for its employees to exchange and trade tokens while contributing ideas and joining programs intended to foster development. As per Cheddar, the initiative was developed by about 25 individuals taking six months.
PayPal has built an internal website for its staff to access their private tokens as well as enroll in learning programs to earn more. The tokens are worthless to all but company employees on its blockchain.
PayPal was an anti-crypto and has refused to honor it on its merchant platform because of volatility issues. With PayPal’s lengthy transaction time, the price fluctuations are likely to be massively amplified. The new venture is merely an effort to get employees used to the concept—the company still has no plan to use or adopt public digital currencies.
PayPal has provided “experiences” like martial arts, poker tournaments, and trail runs with head executives for workers who wish to “cash in” their tokens. “Venmo-like feed people can like and comment on and see all the activity going on within PayPal related to innovation,” a senior executive described.
The company is unlikely to be venturing into the real crypto world any time soon. It made $13 billion last year, and a huge chunk of that was derived from overinflated forex rates. Transferring funds between PayPal accounts in different currencies can cost up to 5%. Borderless cryptocurrencies are apparently a threat to such a business model.
PayPal seems interested in the technology though, and the outcome is most likely the creation of a “PayPal token” exclusively redeemable via the platform to facilitate transactions.
Coinbase previously announced that it would allow PayPal for certain customers to withdraw cryptocurrency from its platform. Complete KYC procedure should be adhered to, removing any advantage of leveraging PayPal over a regular bank since the charges are no better.