For bitcoin — indeed for cryptos in general — scale is the name of the game. Not just for trading, of course, where price spikes (and slides) are a hallmark of the speculation that still is rampant, but where scale might, conceivably lead to more rational price discovery.
Scale is critical in the bid to get crypto more prevalent in the commerce ecosystem in general.
To get a sense of how volatile the swings are — bitcoin, that marquee name of crypto, is trading at roughly $12,900, bid up by holders in anticipation that bitcoin may be on its way to the masses.
That sentiment was spurred in part by last week’s news that PayPal would allow customers to buy, hold and sell crypto directly from PayPal accounts.
The cryptos — including bitcoin, Ethereum, Bitcoin Cash and Litecoin — starting early next year, can be used to transact at 26 million merchants across the company’s network.
PayPal is, also, reportedly mulling buying cryptocurrency firms — that would be plural — as reported Friday (Oct. 23) by Bloomberg. The newswire quoted unnamed sources “familiar with the matter.”
As it stands now, according to PayPal’s site, consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency.
Having fiat on either side of the transaction speaks volumes to some of the challenges that surround a more mainstream adoption of cryptos, at least so far.
The swings can work to holders’ advantage and detriment as cryptos such as bitcoin are converted into fiat (with the attendant gains or losses in the conversion).
But, interestingly in what might hint at a longer-term outlook, CEO Dan Schulman said last week that PayPal is “eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
There may be a knock on effect, where using PayPal’s crypto integration may give consumers the familiarity to feel emboldened to try other wallets or platforms.
There are several paths to get there, to that comfort level with everyday use. Of course, along one avenue: the Fed has said it is teaming up with MIT to explore the infrastructure that might underpin digital currencies, and in particular, the digital dollar.
One significant stepping stone to getting digital coinage more widely available came late last month where the Office of the Comptroller of the Currency (OCC) said national banks and federal savings associations to hold reserves on behalf of customers who issue stablecoins. The ruling only applies to cryptocurrency on a one-to-one basis by a single fiat currency.
It’s another piece of the regulatory puzzle that had been coming into sharper focus for crypto, for stablecoins. But there are still gaps.
In a nod to how unsettled the regulatory environment is, at present, CNBC reported…