upstripes | Blockchain | PayPal throwing itself into the blockchain

in #blockchain6 years ago

extracted from coindesk.com.[1]

Online payments giant PayPal has made its first-ever investment in a blockchain technology company.

Announced today, PayPal has joined the extension of a Series A funding round in Cambridge Blockchain, a startup that helps financial institutions and other companies manage sensitive data using shared ledgers.

Neither PayPal nor Cambridge Blockchain disclosed the investment amount, but recent filings with the SEC indicate that Cambridge Blockchain has raised a total of $3.5 million in new equity from several investors over the past nine months. That follows the $7 million close of its Series A in May of 2018, and brings the total capital raised to $10.5 million.

That first $7 million consisted of $4 million of new capital plus $3 million of converted notes, and came from several investors, including HCM Capital, the VC arm of Foxconn, which manufactures the iPhone for Apple, as well as Digital Currency Group.

The subsequent $3.5 million came from PayPal as well as Omidyar Network, the philanthropic investment firm started by the founder of eBay (PayPal’s former parent); Flourish, Omidyar’s financial inclusion investment spinoff; and Future/Perfect Ventures.[1]

PayPal’s CEO (And Former CEO) Wary Of Crypto

As explained earlier, this move only perpetuates the ‘blockchain, not crypto’ dilemma that has raged since Bitcoin became a mainstream topic. More specifically, PayPal’s current CEO and former CEO have both overtly bashed Bitcoin, but here the firm is making this investment.

At Davos, PayPal CEO Dan Schulman, expressed skepticism towards cryptocurrencies, but optimism towards blockchain technologies (what a surprise). Schulman noted that crypto is “more of a rewards system for implementing blockchain,” rather than a currency or Store of Value (SoV) system in and of itself. The PayPal chief added that he’s seen scant retailers adopt this form of exchange, even as infrastructure has bolstered.[2]

Future Use Case of the Technology

The company has a vast amount of experience with strict European General Data Protection Regulation (GDPR) and PSD2, the second European payments directive. One of the major aims of the company is to reduce the myriad of duplication around KYC in the crypto space thus allowing for individuals to go through the process just once to access many different financial services.

This will obviously be a huge benefit for PayPal who have hundreds of millions of users. This will allow largen numbers of people to on-board quickly to many different crypto services and perhaps Bitcoin payments through PayPal.[3]

PayPal’s Support of Cambridge Blockchain

In 2018 Cambridge was one of a small cohort of start-ups in the “Fintech Europe 2018” accelerator program, which was sponsored by PayPal. The CEO Matthew Commons said PayPal has been involved for over a year.

Cambridge Blockchain is exploring this area of blockchain application, as its CEO Matthew Commons explained in the press release, “Our service helps streamline digital identity compliance while giving customers control over their identity data.”

Forbes’ coverage on the subject revealed the popular payment solution PayPal could see advancement from the investment. A spokesperson from the internet payments company said to Forbes, “We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal.”[3]

Self-sovereign identity

Blockchain technology could hold the keys to revolutionizing people’s data security and information verification. The ability to validate information without actually disclosing it, would provide groundbreaking convenience and security.

Other crypto projects working in the blockchain identity space include Civic and SelfKey.[4]

References:

  1. https://www.coindesk.com/paypal-makes-its-first-ever-investment-in-a-blockchain-startup
  2. https://ethereumworldnews.com/paypal-delves-into-a-blockchain-investment-after-ceo-bashes-crypto/
  3. https://toshitimes.com/paypal-makes-its-first-blockchain-investment-focusing-on-digital-identity/
  4. https://cryptoinsider.com/paypal-throws-its-hat-into-the-blockchain-ring/

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