Finance Monthly - FinTech Awards 2022

currency for the long term, in the belief that it will go up in value. Bitcoin tends to be seen as a nest egg rather than a spending pot. PayPal’s public endorsement of Bitcoin is great. But it doesn’t change as much as one would think, either for Bitcoin, or PayPal, or traditional banking. Any merchant or user accepting Bitcoin via the app won’t actually receive Bitcoin. The digital currency will be converted in same time to their choice of fiat currency, meaning that as far as they’re concerned, they receive fiat. Had PayPal enabled its merchants to accept and hold money in Bitcoin, and to make other payments in Bitcoin, that might be a slightly different story. PayPal has indicated they are keen to work closely with regulators and governments to ensure legal compliance in their crypto offering. This will also be true of the many other payment firms looking to accept crypto or already that have a crypto offering. This will potentially help regulators come up with ways to make it easier for other crypto related offerings to get regulated and thus be accepted and used in traditional finance. Other payments firms may also follow Paypal’s lead, making crypto the norm rather than the exception in the roster of offerings expected of traditional finance. So is PayPal’s acceptance of Bitcoin likely to drastically change anything for traditional banking? No, probably not. The move helps win over some new users for PayPal, ups its transaction volume and increases visits to its app. This in turn could help PayPal come up with new ways to monetise its platform. It’s helped prove the legitimacy of Bitcoin, and more broadly crypto, and is another message to traditional finance that accepting crypto will become far more mainstream soon. Even if traditional banks start allowing their users to accept crypto transactions, most likely they will be cashed out into fiat in live time, just as is happening now with PayPal. Will this move be the one that makes traditional banks open up Bitcoin custody offerings to all their clients? No. Not yet, at least. PayPal’s acceptance of Bitcoin and crypto spells out in big letters to any critic claiming crypto is just for scams or crime that Bitcoin is ok. Crypto Wars: Faked Deaths, Missing Billions and Industry Disruption by Erica Stanford is published by Kogan Page, priced £14.99, available online and from all good bookshops. Finance Monthly FinTech Awards 2022. Spec i a l Fea t ur e 75

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