When PayPal announced recently that its 350 million users can deposit bitcoin and other cryptocurrencies in their accounts and spend it at 26 million merchants next year, it was characterized as the inevitable advance of digital currency. Daniel Gouldman, CEO of crypto-banking platform operator Ternio, told Karen Webster that PayPal’s endorsement is a major step in crypto’s quest to go mainstream.
“PayPal has basically just said, ‘Hey, we’re going to open this up to everybody,’” Gouldman said in a recent interview. “Bitcoin is like a [crypto] 101 version. It’s made for Grandma, so no one — my kid, Grandma — can mess it up with PayPal.”
While he’s the first to admit that there are still numerous regulatory hurdles, consumer concerns and corporate uncertainties that need to be addressed, Gouldman said it just keeps the topic in the spotlight and on people’s minds. He said people are talking more and more about the digital dollar, whether it’s on an individual level, in Washington or among U.S. or European central bankers and regulators.
“I think ultimately, the digital dollar is going to become a thing, and that is going to allow for better, cheaper, faster payments. It’s going to completely change the way we interact with money in a way that I don’t think we’re used to, because we’re so used to banks,” said Gouldman, who co-created the BlockCard, a crypto-enabled debit card giving real-world utility to over a dozen cryptocurrencies that can be used at over 61 million merchants worldwide.
You Can’t Spend It … Yet
While few dispute the future potential viability of cryptocurrencies or stablecoins backed by the U.S. dollar, the present is far less encouraging, where efforts to streamline the spending process still loom large.
But Gouldman thinks people’s minds will change over time, and what once was unthinkable will become the norm over the next five to 10 years.
“I think what people think of crypto today [does not reflect] what they will think of it in the future,” he predicted.
For Now, Crypto Is Still Super Volatile
The vast majority of cryptocurrency holders today are investors, many of whom appreciate the volatility the asset class offers. Gouldman said that before the bitcoin/crypto use case can really go mainstream, cryptocurrencies will have to become more spendable.
“We’re completely agnostic as to whether or not it’s a fluctuating asset,” he noted. But he added that there’s already less friction involved in converting bitcoin, as it’s easier to exchange than many other assets like stocks, precious metals or commodities.
That said, he concedes that if someone tries to make a payment with bitcoin at Walmart, “they would have a problem” — and it could take hours or days to complete.
Wanted: Big Backers And Government Support
As far as getting more big backers on board, Gouldman predicts it will take the clout of “an 800-pound gorilla” like Walmart or Amazon to really drive things to the next level.
He said either retail giant could simply tell vendors that if they’re not part of the crypto world, they’re out — “and everyone would comply because they don’t want to lose [Amazon or Walmart’s] business.”
Gouldman said large companies will also have to come on board to force the embrace of crypto — and if they hesitate, FinTechs will step up and fill the void. Governments and central banks will be the final hurdle.
“I think that changes the game when the government accepts [crypto],” he said.
Privacy And Security
However, Gouldman said it will be important that crypto not change the consumer experience — other than to facilitate better, cheaper, faster automation than what currently exists on payment rails that are, in some cases, 50 years old.
But given that corporate treasuries already spend a ton of money on security, payment systems and tracking of operational data, that will become harder to justify in the face of an alternative digital currency.
As far as oft-expressed fears about privacy and money laundering are concerned, Gouldman pointed out that people already launder money through banks, real estate, art, diamonds and other kinds of commodities.
“The difference with cryptocurrency [is] that it’s a lot more transparent,” he said. “And for the people who think cryptocurrency somehow provides privacy, they’re highly mistaken. It’s the opposite.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More