In Latin America, PayPal intends to introduce cryptocurrency services. Bitcoin recently surpassed PayPal in the total amount moved.
PayPal allows cryptocurrency transactions only in the United States.
This service will spread to England and subsequently to Latin America.
The Bitcoin network already transfers more money than PayPal.
PayPal's general manager for Latin America, Federico Gómez Schumacher, spoke about the company's plans to provide cryptocurrency services in the region. This function is now only available to consumers in the United States, but the business aims to spread it globally.
In an interview with Bloomberg (Spanish), Mr. Schumacher mentioned that the business intends to expand this service abroad. Users in Latin America may be the next to be allowed to use cryptocurrencies in PayPal since they would activate it shortly in England.
The director said they see significant potential in allowing cryptocurrencies on PayPal Latin America because they facilitate money transactions between countries. He cautioned that it is most helpful in places where there are restrictions on receiving foreign currency.
Mr. Schumacher added that it is crucial that "there is a well-defined regulation because obviously, these things need a correct regulatory framework." He argues that this is the only way to ensure that all parties participating in the transaction are protected.
PayPal in the United States currently allows acquiring and storing four cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). This year it also enabled payments with these assets. So far, in the rest of the world, the platform only works to make transactions with fiat currencies, such as dollars and euros.
PayPal talks about Argentina, Mexico, Brazil, and Colombia
Federico warns that PayPal in Argentina has been operating with exchange restrictions for more than ten years. Only for a short time, he recalls that they have had no limitations. He points out that this may be one of the reasons why Argentina did not grow as much as in other countries during the year, despite the existing demand they noticed.
The director tells that the Latin American countries that grew the most in PayPal during 2021 were Mexico, Brazil, and Colombia. He points out that the first was because its population is adopting digital financial tools that other countries in the region had already started using before.
According to the region director, PayPal clients in Latin America make up less than 5% of the company's total globally. "It's still a small percentage today," he says, "but it's also the fastest-growing region." Consequently, he claims there is a lot of interest in continuing to invest in the territory for it to grow. Poverty and a lack of access to financial services are two of the most significant concerns people face in the area, according to him.
Bitcoin big business
The Bitcoin network already moves more money than PayPal, according to Blockdata, a group that advises businesses and governments on blockchain technology. It hopes to surpass Mastercard and Visa in terms of volume in five years. In 2021, Bitcoin will process around $490 billion every quarter.
According to Blockdata, a firm that advises businesses and governments on blockchain technology, Bitcoin transfers more money than PayPal. In five years, it expects to exceed Mastercard and Visa in terms of volume. According to a study, the Bitcoin network will trade over $489 billion every quarter in 2021. It outperforms PayPal, which had a market valuation of $302 billion at the time.
However, Bitcoin would still need to grow by 260% more to catch up with Mastercard and 540% to overtake Visa. Although it argues that it will achieve these goals soon considering how much it has grown in such a short time. Each of these two networks processed around $1.8 trillion and $3.2 trillion per quarter in 2021.
It is impressive how Bitcoin, as a 12-year-old decentralized network, is 27% of the way there in terms of one metric (volume processed) compared to Mastercard, a company founded in 1966. Blockdata
Unlike Visa, Mastercard, and PayPal, nobody can control Bitcoin. It works by connecting individuals and businesses all across the world in a decentralized manner.
Three ways Bitcoin could overtake Visa
Blockdata warns that three possible paths would make Bitcoin overtake Visa, the most significant financial network in the market. This scenario will occur if the cryptocurrency's price grows by 540%, the volume of money transferred in transactions, or the number of transactions.
Based on the cryptocurrency's historical yearly worth, the network would reach this target in 2060. It does, however, caution that it will most likely be sooner. Bitcoin will overtake Visa in 2026 if the price of bitcoin continues to rise at the same rate as it did in 2021. 1 BTC is valued at $57,749 on the market. As a result, it believes that a solution will need to be developed on the second layer of the blockchain at some point for it to settle more transactions than it does currently.