Speaker 1: When we enabled our customers on PayPal and Venmo to
Speaker 1: buy hold slid spend cryptocurrency on the platform. We extended
Speaker 1: that to a couple of other countries a little bit
Speaker 1: later on, and we use that as a real opportunity
Speaker 1: to bring that asset class to our customers and also
Speaker 1: internally to get some more visibility and experience with the technology.
Speaker 2: This content is brought to you by bitco, which is
Speaker 2: one of the top crypto custodians in the crypto industry.
Speaker 2: Bitco works with many big companies and brands such as
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Speaker 2: many great services such as hot wallets, custodial wallets, self
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Speaker 2: with its top level security and incredible services such as
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Speaker 2: which includes lending, borrowing, trading, staking, DeFi access and more.
Speaker 2: If you'd like to learn more about bitco, please visit
Speaker 2: bitgo dot com link in a description. Welcome into the
Speaker 2: Thinking Crypto Podcast. I'm your host, Tony Edward and my
Speaker 2: guest today is Edwin Aoki, who's the CTEO of PayPal's Blockchain,
Speaker 2: Crypto and Digital Currencies unit. Edwin, great to have you on.
Speaker 1: It's great to be here, Edwin.
Speaker 2: I am very excited to speak with you. PayPal is
Speaker 2: doing some amazing things as it relates to crypto, and
Speaker 2: of course you have a stable coin py USC. I
Speaker 2: have a lot of questions for you around these things,
Speaker 2: but before we get there, tell us a bit about yourself,
Speaker 2: where you're from, and what's your professional background.
Speaker 1: Sure, I've been here at PayPal for a little over
Speaker 1: fourteen years now, which seems like forever. Been in this
Speaker 1: role for about four coming on five years of that.
Speaker 1: Prior to that, I was PayPal's chief architect, looking over
Speaker 1: architecture and prize technology across all of our divisions and
Speaker 1: business units. Before that, had a lot of fun times
Speaker 1: at Netscape, which was acquired by AOL, was there for
Speaker 1: a while into it Apple, a few startups here in
Speaker 1: Silicon Valley. Got to be sort of in and around
Speaker 1: a lot of fun pivotal moments in the dawn of
Speaker 1: the consumer Internet.
Speaker 2: So it seems you've always had a passion for tech.
Speaker 2: You were in Web one point zero into Web two
Speaker 2: and now Web three.
Speaker 1: Yeah, that's right. We didn't think of it as Web
Speaker 1: one point you know, back then, but yeah, I sort
Speaker 1: of fell into that. And I've been really fortunate to
Speaker 1: be with a number of really smart people, and I'm
Speaker 1: number of really what turned out to be influential companies
Speaker 1: in the space.
Speaker 2: You know, I've interviewed quite a few alumni from Netscape,
Speaker 2: and of course, you know, you have Mark and Dreesen
Speaker 2: and these folks have a sixteen Z. But it's amazing
Speaker 2: how many people from Netscape are here building Mike Belshi
Speaker 2: and the name goes on Bill Bill from Abra and
Speaker 2: much more.
Speaker 1: Yeah, you know, I think that a lot of that
Speaker 1: stems from some of the idealism that a lot of
Speaker 1: us had in those early days around really being able
Speaker 1: to democratize what was at the time communications and publishing,
Speaker 1: and that sort of extends naturally into you know, ultimately
Speaker 1: democratizing financial services and identity and other areas that I
Speaker 1: think blockchain and crypto really touch on.
Speaker 2: So do you see that, you know, this space, this
Speaker 2: technology of blockchain is indeed Web three, that this is
Speaker 2: what Web three will be about, you know, things being tokenized,
Speaker 2: value being token ouised on the blockchain, the ability to
Speaker 2: transact with blockchain, and so forth.
Speaker 1: Yeah, you know, I think actually we're still probably pretty
Speaker 1: early on in the evolution of Web three, and these
Speaker 1: kind of the kinds of things that often aren't really
Speaker 1: apparent until after you get a little bit further out.
Speaker 1: You know, I don't think that we saw thought Web
Speaker 1: two was Web two until Web three came along. Yes,
Speaker 1: So you know, clearly I think there's a trend there
Speaker 1: in terms of decentralization, distribution, you know, really also looking
Speaker 1: at sort of where technology and innovation comes from in
Speaker 1: terms of the north South divide. But I don't know
Speaker 1: that we'll really know exactly what sort of the heart
Speaker 1: of Web three h is until we're a little bit
Speaker 1: maybe even until we're a little bit further out of
Speaker 1: it and we get to look back with a little
Speaker 1: bit more perspective.
Speaker 2: Yeah, that's true, because oftentimes you don't know what's going
Speaker 2: to stick and what's going to get adoption. Right, there
Speaker 2: were so many ideas in these in Web one and
Speaker 2: Web two point zero, but it's kind of you have
Speaker 2: to look back in hindsight and say, oh, I see
Speaker 2: this is what worked and what consumers wanted.
Speaker 1: Yeah, that's right. I mean I think that, you know,
Speaker 1: for a while, there are a couple of years ago
Speaker 1: NFTs were supposed to be the big thing Web three.
Speaker 1: Those might come back because certainly being able to have
Speaker 1: individual sort of digital goods is important, but that seems
Speaker 1: to have died down a little bit at the moment
Speaker 1: for obvious reasons. A lot of the talk is around bitcoin,
Speaker 1: but whether or not that ends up being the defining
Speaker 1: aspect of Web three or there's something else. I think
Speaker 1: that we'll know a little bit more in the in
Speaker 1: the rear of your mirror.
Speaker 2: What was your first encounter with bitcoin or crypto and
Speaker 2: what was your aha moment?
Speaker 1: Yeah, you know, actually I think it was my husband
Speaker 1: that introduced me to bitcoin a long time ago. I
Speaker 1: will admit that at the time, I saw it really
Speaker 1: as a store of value, a commodity, much like gold
Speaker 1: or other kinds of assets, and you know, I thought
Speaker 1: it was interesting, but nothing particularly revolutionary at the time.
Speaker 1: In my previous role as PayPal's chief architect, I had
Speaker 1: the privilege of overseeing our sort of horizon to research
Speaker 1: and innovation unit, and there we started looking at blockchain
Speaker 1: sort of as a core technology really around that distributed
Speaker 1: data and decentralized computing model, and we started getting really
Speaker 1: excited about that, not just for value exchange and crypto,
Speaker 1: but really around a number of different axes. And I
Speaker 1: think it was there when it really started to come
Speaker 1: together that it addition to the ethos of decentralization that
Speaker 1: the speed, the lower cost, the transparency, the programmability of
Speaker 1: this could have real dramatic implications for payments. And obviously
Speaker 1: PayPal is a payments company. We're really interested in being
Speaker 1: able to understand what's coming next in this space and
Speaker 1: being able to lead that space. And I think that
Speaker 1: sort of those two things together really sort of brought
Speaker 1: it home that hey, here was a foundational technology that
Speaker 1: was sort of interesting in itself, but there were also
Speaker 1: some really important use cases that could enable that suddenly
Speaker 1: made it real.
Speaker 2: Now PayPal has been ramping up your efforts around crypto
Speaker 2: and blockchain and so forth. Can you give us an
Speaker 2: overview of all the different initiatives you guys have running.
Speaker 2: I know there's crypto trading, stable coins, and if there's
Speaker 2: anything else you want to highlight.
Speaker 1: Yeah, sure. So you know, we started to get into
Speaker 1: this space in the retail context in twenty twenty when
Speaker 1: we enabled our customers on PayPal and Venmo to buy, hold, sell,
Speaker 1: and spend cryptocurrency on the platform. We extended that to
Speaker 1: a couple of other countries a little bit later on,
Speaker 1: and we used that as a real opportunity to bring
Speaker 1: that asset class to our customers and also internally to
Speaker 1: get some more visibility and experience with the technology, and
Speaker 1: that really led up, i think, to twenty twenty three
Speaker 1: when we launched PayPal USD, our stable coin that you mentioned,
Speaker 1: which we call p y u s D, which really
Speaker 1: sort of culminates the thinking around our view that digital
Speaker 1: assets and digital currencies can be a real game changer
Speaker 1: in the payments space, and since then we've been really
Speaker 1: i think proving that out through a number of use
Speaker 1: cases and applications. In April, we added that as a
Speaker 1: funding source to our remittance platform Zoom that allowed for
Speaker 1: customers on the pay Pal platform to make their international
Speaker 1: remittance transfers with zero transaction fees when they fund with
Speaker 1: p y u s D. We added the Salona blockchain
Speaker 1: as a base protocol to p y u s D
Speaker 1: back in May. That brings sort of a different set
Speaker 1: of runtime characteristics around speed and cost and scale to
Speaker 1: the platform. And then most recently in the last few months,
Speaker 1: we've really ramped that up by making our first business payments.
Speaker 1: You mentioned I think in the pre show that we
Speaker 1: settled an invoice with Ernst and Young e Y using
Speaker 1: p y U s D thanks to our friends over
Speaker 1: at SAP and coin based prime. That really starts to show,
Speaker 1: I think, how business to business payments can work, you know,
Speaker 1: with twenty four to seven settlement and instant finality or
Speaker 1: near instant finality. In a broader context, we added E
Speaker 1: and S support. I think also in September it was
Speaker 1: we launched the bisell Hold product for our merchant base
Speaker 1: in the US, and then just this week we have
Speaker 1: started to use p y U s D with our
Speaker 1: distribution partners on Zoom, starting with Subuana and yellow Card,
Speaker 1: to allow for you know, that behind the scenes leg
Speaker 1: of funding those in sorry, those international remittances to operate
Speaker 1: on these more efficient, more cost effective uh uh settlement rails.
Speaker 2: Now, I know some people are going to listen to
Speaker 2: this and they're gonna say, wait a minute, I've used
Speaker 2: PayPal over the years, why do I need a stable coin.
Speaker 2: What is the purpose and why does PayPal even need that?
Speaker 2: They have so many customers, they're doing so many millions
Speaker 2: of transactions with merchants and users, And I know the
Speaker 2: answer to that, but I want to make sure folks
Speaker 2: who are new today's asset class, uh, you know, they
Speaker 2: understand that the behind the scenes, how the sausage is
Speaker 2: made that what's the problem being solved with with with
Speaker 2: digital assets and stable coins?
Speaker 1: Yeah, I mean, I think it's a great question, Tony.
Speaker 1: And you know, if you think about folks that use PayPal,
Speaker 1: particularly in a lot of the developed world, you already
Speaker 1: experienced the benefits of having what appears to you to
Speaker 1: be instantaneous settlement, you know, a digital wallet that that
Speaker 1: works most of the places that you want to be
Speaker 1: able to transact and to have the speed and safety
Speaker 1: and convenience of something that just works with a smartphone
Speaker 1: in your pocket. When we think about p y U,
Speaker 1: s D, we think of it in some sense as
Speaker 1: sort of taking that balance that people really know and
Speaker 1: love about PayPal and being able to tokenize that and
Speaker 1: externalize that outside of the PayPal platform. So even though
Speaker 1: we may want PayPal to be available to every single
Speaker 1: person on the planet. The reality is that at the moment,
Speaker 1: not yet, what we can do with p y U
Speaker 1: s D though, is that we can start to bring
Speaker 1: some of the convenience, some of the the form factor
Speaker 1: and the ability to be able to move funds quickly
Speaker 1: and easily across different sets of payment rails around the
Speaker 1: world to a larger group of individuals, people who either
Speaker 1: may not have access to PayPal, people may who may
Speaker 1: not choose to use PayPal, or entire industries and verticals
Speaker 1: which today might not think of PayPal as their first choice.
Speaker 1: So I mentioned the business to business payment that we
Speaker 1: made with e Y. Typically today, you know, a huge
Speaker 1: amount of the commerce transactions that happened between enterprises don't
Speaker 1: use PayPal. They don't, in fact use digital settlement rails
Speaker 1: for the most part at all. They're still using wire
Speaker 1: transfers or bank payments or invoices and money payment orders
Speaker 1: in order to transact sort of in day to day business.
Speaker 1: And you know, you and I know Tony that behind
Speaker 1: the scenes, those things take time. Wire transfers take a
Speaker 1: while to settle, they can be expensive, particularly with small businesses.
Speaker 1: They can lead to cash flow and sort of money
Speaker 1: movement challenges as they work their way through the financial system,
Speaker 1: and we think that stable coins really offer an alternative
Speaker 1: that streamlines that ability and really makes it easier for
Speaker 1: businesses and individuals of all sizes to be able to
Speaker 1: have greater control over their assets and really experience the
Speaker 1: benefits of something like PayPal in a much wider realm.
Speaker 2: So in addition to the ability to obviously settle faster,
Speaker 2: it is a more twenty four to seven asset class
Speaker 2: and technology where you know, these scenes can be sent
Speaker 2: settled instantly through these stable coins. Are you planning to
Speaker 2: offer other services with these stable coins like yield or
Speaker 2: anything like that.
Speaker 1: Yeah, you know, Tony, I mean, we always are listening
Speaker 1: to what our customers are are asking us to do.
Speaker 1: We obviously start with, you know, a view that is
Speaker 1: really coming back from those customer needs, and you know,
Speaker 1: for that, we've really or we really use that to
Speaker 1: focus on some of the key things that we've introduced
Speaker 1: in the last year around commerce, being able to move
Speaker 1: to a faster transaction settlement time with lower network fees
Speaker 1: on Salana, creating greater utility around you know, payment based interactions,
Speaker 1: really streamlining a lot of these things behind the scenes
Speaker 1: so that we can make payments easier for customers. You know,
Speaker 1: as we uh hear more from our customers, as we
Speaker 1: get greater clarity in the regulatory markets, h and as
Speaker 1: we look to you know, all the innovation that's happening
Speaker 1: in the industry. You know, we'll obviously look at new
Speaker 1: features that are going to bring new kinds of benefits
Speaker 1: and new kinds of opportunities to the market.
Speaker 2: And you mentioned moving to Solana. Are there plans to
Speaker 2: add other blockchains? Given that it seems we're headed to
Speaker 2: a multichain world, there won't be one blockchain to rule
Speaker 2: them all, so to speak.
Speaker 1: Yeah, I mean, we started py usd with the intention
Speaker 1: of being multichain. Obviously, we love the Ethereum community in
Speaker 1: the Arc twenties. We started there because of the distribution
Speaker 1: and the wide developer support and the innovation that happens there.
Speaker 1: We knew at the time that we also wanted to
Speaker 1: be able to bring in alternatives that had lower network
Speaker 1: fees and higher throughput that would be needed for settlements.
Speaker 1: We were also really enamored with the work the Salona
Speaker 1: Foundation did on token extensions, which we think are really
Speaker 1: important technical aspects that help bring features like greater privacy
Speaker 1: and greater program ability for payments, which we think will
Speaker 1: be important. And as we hear from our developer communities,
Speaker 1: from our customers around the other environments and ecosystems that
Speaker 1: they want to use p y U s D and
Speaker 1: obviously we'll consider that we're in conversations all the time
Speaker 1: with pretty much everybody in the ecosystem, as you might imagine,
Speaker 1: and you know, we'll see what comes out of that.
Speaker 2: M Now, in regards to market share, Edwin, I mean,
Speaker 2: I think it's all secret. There is a race now
Speaker 2: with stable coin issu ins, and everyone is trying to
Speaker 2: launch your own stable coin. Yeah, and you know, obviously
Speaker 2: the leader so to speak, if you want to call
Speaker 2: that right now is us d T has been for
Speaker 2: a long time. Then there's us d C. How are
Speaker 2: you planning to get more of steel market share from
Speaker 2: those folks?
Speaker 1: You know, it's actually really great to see I think
Speaker 1: the validation of stable coins, and I think really the
Speaker 1: industry really coming to the same kinds of conclusions that
Speaker 1: we came to a while back around the utility of
Speaker 1: this and the ability to really start thinking about payments
Speaker 1: use cases, because again you know, a lot of the
Speaker 1: stable coins that and the conversations that are happening now
Speaker 1: have been around the utility of stable coins rather than
Speaker 1: the store of value that you know, a lot of
Speaker 1: the discussion was a couple of years ago. Even in
Speaker 1: the space, it might surprise you that market cap and
Speaker 1: market share is not the primary thing that we're going
Speaker 1: for with p y U s D. Really, we slipped
Speaker 1: out to do this as a token for payments, as
Speaker 1: a way to move value around, so we're much more
Speaker 1: interested in being able to drive movement of the token.
Speaker 1: We're much more interested in the use cases like around
Speaker 1: the euy or sebuanna and yellow card, where folks are
Speaker 1: using p y U s D to solve real problems
Speaker 1: in the payments and commerce space. Naturally, we think that
Speaker 1: as that picks up, that the market share will come
Speaker 1: from that. But our primary focus is really around these
Speaker 1: utility uh uh, these utility applications and being able to
Speaker 1: bring this into the movement of real world value, and
Speaker 1: then market share we think will come secondarily from that. Yeah.
Speaker 2: Absolutely, I love what you said about solving you know,
Speaker 2: a real world problem, and obviously you have a large
Speaker 2: customer base already and are are you talking to other
Speaker 2: enterprises like e Y and looking to do pilots and
Speaker 2: things like that.
Speaker 1: Absolutely, I mean I think that, you know, what we
Speaker 1: showed with SAP is the ability to really start invoicing
Speaker 1: and thinking in a fully digital realm. You know, it's
Speaker 1: I think it's really been instructive for us. You know, SAP,
Speaker 1: I think they have all of the Fortune five hundred
Speaker 1: if you know, if not all, then then certainly a
Speaker 1: substantial majority of that. And I think that one of
Speaker 1: the things that's really interesting for us around that is
Speaker 1: that we're looking to bring P y U, s D
Speaker 1: and digital assets into places where people already are. So
Speaker 1: if you are a large enterprise, you're already using SAPs
Speaker 1: ERP system. If you are a retail customer, for example
Speaker 1: here in the United States, you are probably already using
Speaker 1: PayPal or Vemo. Our whole aspect here is that, you know,
Speaker 1: we're not trying to get people to do something radically
Speaker 1: different from what they've been doing before, because habits die hard.
Speaker 1: What we're looking to do is make those experiences better,
Speaker 1: less expensive, faster, safer through the use of these technologies,
Speaker 1: some of which will be visible to customers and some
Speaker 1: of which will be sort of buried in the back end,
Speaker 1: but we'll just make things more efficient under the covers.
Speaker 1: And so you know, for us, what we're looking to
Speaker 1: do is to work with partners UH, to work across
Speaker 1: our customer base, and to work across services within the
Speaker 1: PayPal ecosystem, so that using p y U s D
Speaker 1: and using digital assets, like I said, is just as
Speaker 1: easy and convenience is using your balance, or just as
Speaker 1: easy and convenient as using any other payment method that
Speaker 1: you use today. Yeah.
Speaker 2: Absolutely, talk to us about the relationship or the dynamic
Speaker 2: between PayPal and Venmo and is there going to be
Speaker 2: anything unique as it relates to crypto or the use
Speaker 2: of p y U s E or is just going
Speaker 2: to be kind of the same strategy.
Speaker 1: Yeah, well, I mean obviously, you know, Venmo and PayPal
Speaker 1: serve slightly different audiences today. You know, Venmo is a
Speaker 1: much more social experience. It's a it's an area that
Speaker 1: you know, gets used a lot for personal person transactions.
Speaker 1: A lot of where crypto in its early days was
Speaker 1: used around sort of peer to peer activities. We see
Speaker 1: a lot of activity there, the ability to actually move
Speaker 1: funds from PayPal to Venmo and vice versa was facilitated
Speaker 1: on our platform for the first time through p y
Speaker 1: u s D. So a lot of people don't know
Speaker 1: that if you are a PayPal or a Venmo user,
Speaker 1: you can transfer p y u s D without fees
Speaker 1: between accounts on those platforms today and it happens instantaneously,
Speaker 1: and it happens really seamlessly in that regard. But you know,
Speaker 1: we look to bring features that are appropriate to those
Speaker 1: platforms to life. Uh, and we are excited about expanding
Speaker 1: both the PayPal and the Vemo platforms, you know, with
Speaker 1: all of the new things that we're working on. And
Speaker 1: as I said, stay tuned, there's a lot more to come.
Speaker 2: Yeah, I'm a user of both platforms and Venmo. To
Speaker 2: your point, there's more of that social aspect. And I
Speaker 2: was thinking, I'm just thinking out loud, but you know
Speaker 2: that it would be amazing if the regulatory laws and
Speaker 2: all these things in our alignment, but to have some
Speaker 2: sort of social trading platform that's regulated with crypto and
Speaker 2: I can send money, but I can also highlight, hey,
Speaker 2: I bought some bitcoin, or I'm doing this whatever may be,
Speaker 2: or I have this NFT. I feel that would be
Speaker 2: an easy plug into Venmo, but just thinking out loud.
Speaker 1: Yeah, well, I mean, look, we'll take that into into consideration.
Speaker 1: But I mean already today, if you are buying and
Speaker 1: selling bitcoin or one of the other supported currencies on
Speaker 1: the platform, you have the option of exposing that as
Speaker 1: part of your Venmo social feed and starting a conversation
Speaker 1: around that, just as you can and with any other
Speaker 1: of the Venmo transactions. And you know, I think that
Speaker 1: that the crypto demographic is very well matched to the
Speaker 1: Vemo demographic. And you know, again we've been really excited
Speaker 1: about how those things come together. You know, on the
Speaker 1: Venmo platform, for example, you can if you have the
Speaker 1: Vemo credit card, you can choose to receive your rewards
Speaker 1: and crypto off of that. And you know, we've seen
Speaker 1: a lot of folks really being especially as bitcoin has risen,
Speaker 1: some of the people that have chosen to receive their
Speaker 1: Venmo card rewards and bitcoin, you know a year ago,
Speaker 1: are really I think appreciating head choice today.
Speaker 2: Jumping back to p y u s D, tell us
Speaker 2: a bit about the reserves behind p y u s
Speaker 2: C because that's of course a big element of stable
Speaker 2: coins and a lot of people are they have eyeballs
Speaker 2: on this now because stable coin legislation is being worked
Speaker 2: on in the US. The has passed a version, So
Speaker 2: tell us about what the reserves is made of.
Speaker 1: Yeah, I mean, you know, I think that you talked
Speaker 1: a little bit about this with Charles from Paxos a
Speaker 1: little while ago on your podcast. But you know, our
Speaker 1: reserves are held entirely of used dollar denominated assets in
Speaker 1: US bank accounts in a in segregated accounts that are
Speaker 1: intended to be bankruptcy remote in trust. So you know,
Speaker 1: this is pretty much the gold standard in how we
Speaker 1: manage reserves and how we ensure that we are holding
Speaker 1: a dollar's worth of funds for every dollar of tokens
Speaker 1: that get issued, and those reserves, how the costodients hold
Speaker 1: the reserves, all of that is, you know, as you know,
Speaker 1: very crucial to maintaining that dollar equivalence. It's overseen by
Speaker 1: the New York Department of Financial Services. All the reports
Speaker 1: are audited and available through the website of our issue
Speaker 1: or PACSO, and we're very very proud of, I think
Speaker 1: the level of care and attention that we've put into
Speaker 1: that process because we think that it's crucial to really
Speaker 1: helping people to have the confidence that you know, this
Speaker 1: is this has been built and designed in a way
Speaker 1: that is worthy of of of their trust and.
Speaker 2: PayPal absolutely, And what are your thoughts on possibly the
Speaker 2: legislation coming in very soon in the United States, which
Speaker 2: I think would be very good for the market, protect consumers,
Speaker 2: but allow innovators and builders to you know, be able
Speaker 2: to do their thing without having to look over your shoulder.
Speaker 1: Yeah. I mean, we've always had a compliance and regulatory
Speaker 1: first approach to the work that we've done here. You know,
Speaker 1: we have we're the recipients of New York's first conditional
Speaker 1: bit license. We were the first company then convert that
Speaker 1: into a full bit license, and so, you know, being
Speaker 1: able to have a strong regulatory foundation and clear regulatory
Speaker 1: guidelines have always been important to us. You know, I
Speaker 1: think that it remains to be seen exactly what the
Speaker 1: shape of that is. There's a number of bills moving
Speaker 1: through Congress here in the United States, and you know,
Speaker 1: we're committed to following that process and and uh sharing
Speaker 1: our learning as where appropriate and then hopefully seeing something that,
Speaker 1: like you said, encourages that innovation but manages to protect
Speaker 1: consumers and and provide clarity for US as an industry.
Speaker 2: Now, I know maybe is too early to probably think
Speaker 2: about this, but are you planning to launch a p
Speaker 2: Y E U R you know the euro?
Speaker 1: You know, we get that a lot tony and I
Speaker 1: think that you know, as I said before, we're going
Speaker 1: to follow where our customers go and what they're asking for.
Speaker 1: But I think it's important to just sort of recognize
Speaker 1: that today. You know, if you think about stable coins,
Speaker 1: they're really used as the other side in many cases
Speaker 1: of crypto transactions, whether in the DeFi space or in trading,
Speaker 1: and our ambition is to really use stable coins as
Speaker 1: part of global commerce. And today both of those use
Speaker 1: cases are primarily denominated in dollars, So the liquidity is
Speaker 1: deepest on crypto between for example, bitcoin and US D
Speaker 1: versus bitcoin and euro, or bitcoin and EN. So most
Speaker 1: of the trading happens in dollar denominating exchanges in dollar
Speaker 1: denominated pairs. And if you look at sort of where
Speaker 1: you know, global commodities are priced, if you look at
Speaker 1: sort of how global trade works, the dollar is the
Speaker 1: US sorry, the dollar is the world's reserve currency, but
Speaker 1: it's also primarily the world's transaction currency. When you think
Speaker 1: about cross border and so you know, the and and
Speaker 1: the need for dollar denominated assets and dollar denominated digital
Speaker 1: goods I think is still largely outweighs you know, some
Speaker 1: of the work that's happening inside of even very large
Speaker 1: trading blocks like the EU or or other parts of Asia.
Speaker 1: And so I think that you know, we will you know,
Speaker 1: continue to serve that space. And uh, as the need
Speaker 1: and as the desire for more regional or local currencies
Speaker 1: comes on board, we will absolutely respond to that. But
Speaker 1: right now, I think that the biggest area of opportunity
Speaker 1: and the biggest area of demand is in dollars.
Speaker 2: Yeah. Absolutely, And I think in d C there's a
Speaker 2: lot of talks now of you know, how the United
Speaker 2: States can preserve the world reserve currency status, and stable
Speaker 2: coins will play a big part of that. Because the
Speaker 2: world wants dollars and you can give it to them
Speaker 2: in a faster, cheaper, instant settlement format that that that's
Speaker 2: a win.
Speaker 1: So absolutely absolutely.
Speaker 2: Now, uh a question I'm really curious about. Yeah, Elon Musk,
Speaker 2: one of the founders of PayPal, and even Peter Thiel,
Speaker 2: one of the founders of PayPal, Uh, are you in
Speaker 2: talks with them to use p y u s D
Speaker 2: in any way. Most mostly this question is about Elon
Speaker 2: because he has X, he has UH, he has enterprises
Speaker 2: like Tesla and and and space X and so forth.
Speaker 2: Are there any conversations happening.
Speaker 1: You know, I'm on the technology side, Tony, so I
Speaker 1: don't know if I don't know of any of those
Speaker 1: conversations that are happening. You know, I think that we welcome,
Speaker 1: as I said, p y U s D is really
Speaker 1: designed for commerce, whether that is from you know, UH,
Speaker 1: consumers to small businesses, whether that's between large enterprises you know,
Speaker 1: or or other sort of larger payments that that happened
Speaker 1: in the larger global supply chain. I'm sure we would
Speaker 1: welcome sort of any opportunity to you know, make those
Speaker 1: more efficient, whether that's for Elon or anybody else. But
Speaker 1: I'm not aware of anything specific that we're having a
Speaker 1: conversation with them about. Well.
Speaker 2: As a user of PayPal, Venmo and X, if I
Speaker 2: could tip someone in p y U s D on X, hey,
Speaker 2: great tweeter, great information, or send somebody some money instantly
Speaker 2: with p y U s E, I would be using
Speaker 2: that product, so.
Speaker 1: Fair enough, you know, it's really interesting that you mentioned that, Tony,
Speaker 1: because we had a p y u s D hakathon
Speaker 1: a little while ago and one of the finalists and
Speaker 1: I was sort of lucky enough to be one of
Speaker 1: the judges, and one of the things that we were
Speaker 1: seeing was the ability for on the Forecaster platform, which
Speaker 1: some of your listeners may know that is sort of
Speaker 1: a decent centralized social network built on Web three principles.
Speaker 1: One of the finalists has a tipping platform on that
Speaker 1: using p y u s D, and so, you know,
Speaker 1: I think it shows that there is a real opportunity
Speaker 1: to use these open source mechanisms and you know, these
Speaker 1: open protocols that p y u s D is built on,
Speaker 1: and start to bring whether that's tipping, whether that's commerce,
Speaker 1: whether that's some of these other sorts of use cases
Speaker 1: into places like social networks that you know, maybe we
Speaker 1: weren't necessarily thinking about or isn't really our core business,
Speaker 1: but that everybody needs payments, right, and so if we're
Speaker 1: able to make payments easier, easier to use, easier to integrate, faster,
Speaker 1: and cheaper to settle, that's going to be a win
Speaker 1: for everybody.
Speaker 2: Yeah, and I can't wait for today where there's more
Speaker 2: interoperability between these platforms and they all into grate blockchain,
Speaker 2: and I can easily, like I said, just maybe I
Speaker 2: just do a simple command and it sends you add
Speaker 2: when five p y USD on Twitter or somebody once
Speaker 2: again that I like their content or whatever it is,
Speaker 2: or buy something from them, and it's that easy. I
Speaker 2: don't have to Okay, I need to log into this app,
Speaker 2: I need to give me your wallet address. I don't
Speaker 2: have to do all those things.
Speaker 1: Yeah, and you know, I think that the fact is
Speaker 1: that when we think about things like micro payments or
Speaker 1: streaming payments, that's where digital currencies can really come into
Speaker 1: its own. You don't have a lot of the fixed
Speaker 1: overhead that comes from you know, traditional payments methods. Like
Speaker 1: you said, it can be instantaneous and so you can
Speaker 1: really get that feedback loop going much more readily. You
Speaker 1: don't necessarily have to have accounts and subscriptions set up
Speaker 1: in advance. And so, yeah, we really do see that
Speaker 1: there's an opportunity, I think, particularly in the creator space,
Speaker 1: particularly in social uh that digital currencies can really start
Speaker 1: to move value in a much more effective way that's
Speaker 1: matched to sort of the Internet and matched to the
Speaker 1: distribution of media and content today, and we're starting to
Speaker 1: see some of that happen'd love to see more of it.
Speaker 1: It would be great to start to be able to
Speaker 1: have tips coming into your podcast, Tony with T Y
Speaker 1: U s D. Maybe sometimes soon.
Speaker 2: That'd be great. If you're if you guys are working
Speaker 2: on something that's you know, you're in the beta format.
Speaker 2: I would love to help test it out for you,
Speaker 2: So keep me in mind.
Speaker 1: All right, all right, we'll do that.
Speaker 2: Now, a more macro view question here, what does the
Speaker 2: future payments look like? For PayPal? And you touch a
Speaker 2: bit on it, right, and web monetization, micro payments and
Speaker 2: things like that, but with stable coins, with digital assets
Speaker 2: and so forth. You know, what do you I guess
Speaker 2: let's put a timeline. How do you see this market
Speaker 2: in five years?
Speaker 1: Yeah? I mean, you know, I think, Tony, if you'd
Speaker 1: asked us five years ago whether or not we'd be
Speaker 1: looking at bitcoin pushing one hundred K today, I don't
Speaker 1: know that we would have predicted that. So that's a
Speaker 1: pretty long time frame in this business, as you know,
Speaker 1: you know, we've been always about being able to offer
Speaker 1: our consumers and merchants choice and so we want to
Speaker 1: have the maximum amount of flexibility in how people choose
Speaker 1: to pay for things. We want to have our merchants
Speaker 1: have the ultimate flexibility and how they choose to get paid,
Speaker 1: and PayPal acts as the sort of universal translation layer
Speaker 1: that removes all the friction between those two choices, so
Speaker 1: you know, whether that is across borders, whether that is
Speaker 1: across currencies, whether that across payment types. You know, PayPal
Speaker 1: is really in the business of really making it easy
Speaker 1: for those senders of value and receivers of value to
Speaker 1: come together and take all that complexity out of the
Speaker 1: middle of that. We see the p y U s
Speaker 1: d A is a really important enabler for that because,
Speaker 1: as we've talked about, it enables for that connection to
Speaker 1: happen faster, cheaper, safe, more transparently. It allows for greater
Speaker 1: programmability along the way so that you can really see
Speaker 1: cause and effect and and and and really interesting use
Speaker 1: cases that are maybe triggered by supply chains or triggered
Speaker 1: by other sort of events that are happening outside UH payments,
Speaker 1: but insights or a greater commerce sphere, and you know,
Speaker 1: we see that that that PayPal can be that enabler
Speaker 1: for more chants for consumers as we've always done, just
Speaker 1: sort of eliminated all that complexity along the way. So,
Speaker 1: you know, one thing that you might imagine, you know
Speaker 1: today when you think about you know, you get an
Speaker 1: Amazon package at your door, and the way that you
Speaker 1: know that you've got that package is because you get
Speaker 1: an email with a with a photo of the package.
Speaker 1: You could imagine actually that you know, through greater integration
Speaker 1: with blockchain based supply chains, that you know that full
Speaker 1: logistics path can be tracked all the way to your
Speaker 1: door and you are not really relying on the delivery
Speaker 1: drivers sort of being able to take a photo and
Speaker 1: send it to you. But when that package is delivered,
Speaker 1: your payment can instantly be transmitted and that can actually
Speaker 1: flow all the way back through the supply chain to
Speaker 1: the original producer of the good. And because that happens
Speaker 1: instantaneously or near instantaneously, you remove a lot of the
Speaker 1: inefficiencies around you know, you're able to get to a
Speaker 1: much more just in time payments, add just in time
Speaker 1: manufacturing and chain and just in time economy. That removes
Speaker 1: a lot of the inefficiencies around capital capture, around cost
Speaker 1: of payments, and around these delays that sort of happen
Speaker 1: and are built into the way that payments works today.
Speaker 1: And I think that when we can get there, we
Speaker 1: have better cash flow for small businesses, we have much
Speaker 1: more predictability and visibility for consumers, and the payment system
Speaker 1: just works better for everyone. And that's what we're in
Speaker 1: the businesses for.
Speaker 2: What are your thoughts and this is another macro question,
Speaker 2: but it's you know, AI and robotics and so forth.
Speaker 2: In this more digital world where headed in and more
Speaker 2: technological world where things are going to be automated, it
Speaker 2: seems the perfect time. It is a perfect timing here
Speaker 2: because you have blockchain, you have stable coins in crypto
Speaker 2: which can help facilitate payments maybe between AI agents or robots,
Speaker 2: and you know what Elon's doing with all these things.
Speaker 2: Do you see crypto, you know, playing a big role
Speaker 2: in that economy so to speak?
Speaker 1: Absolutely, I mean, I think we're really bullish on AI
Speaker 1: here at PayPal. But to your point, you can't give
Speaker 1: a chap bought a credit card, right and even if
Speaker 1: you could, sort of how you're able to really tie
Speaker 1: payments at the speed of the internet with the activities
Speaker 1: that you know, those autonomous agents are starting to perform
Speaker 1: on your behalf. There's a mismatch, there's an impedious mismatch
Speaker 1: there between sort of the speed and the and the
Speaker 1: mediums that are used for payments today and what we
Speaker 1: need in a truly connected, sort of autonomous world. And
Speaker 1: so you know, there are a number of companies out
Speaker 1: there that are starting to look at crypto for agent
Speaker 1: based payments. If you go tell your LLM based agent
Speaker 1: to go make a purchase for you or to book
Speaker 1: a trip, how are they going to pay for that right?
Speaker 1: And how are they going to be able to carry
Speaker 1: out your instructions to the extent that commerce is involved.
Speaker 1: And so those are the kinds of things that I
Speaker 1: do think that the programmability of these tools really starts
Speaker 1: to enable. They're much more easier to integrate. Like I said,
Speaker 1: settlement happens instantaneously, and so you don't have to worry
Speaker 1: about a lot of the sort of forward on delays
Speaker 1: and other sorts of things that the payment systems traditionally
Speaker 1: have to think about. And that just makes it a
Speaker 1: much more seamless and natural environment for these agents and
Speaker 1: the developers of these agents to work in. So yeah,
Speaker 1: we absolutely see a lot of potential there, and we're
Speaker 1: committed to working with the ecosystem to flesh out these
Speaker 1: use cases when they come in. You know, we'd love
Speaker 1: to see traditional PayPal partners like Uber or or door
Speaker 1: Dash or others as they start to go more into
Speaker 1: these areas around autonomy, to see how that how that
Speaker 1: plays out.
Speaker 2: What's on your room map for the remainder of twenty
Speaker 2: twenty four and maybe early twenty twenty five.
Speaker 1: Yeah, well, again, we're going to continue to build out
Speaker 1: these use cases around both business and retail aspects. We're
Speaker 1: going to you know, build out the capabilities that we
Speaker 1: think and that we're hearing from our customers that they're
Speaker 1: looking for. And you know, our goal is going to
Speaker 1: be to continue to make py usd the best possible
Speaker 1: stable coin for payments and value exchange across the global economy.
Speaker 1: Mm hmm.
Speaker 2: And when I got some wrap up questions here for you. First,
Speaker 2: if you could your own metaverse, what would the theme be?
Speaker 2: Where would you put.
Speaker 1: Your should know that, yeah, you should know that metaverse
Speaker 1: is my second least favorite word. My least favorite word
Speaker 1: is glamping, by the way, But yeah, you know, I
Speaker 1: my other passion really is around wildlife conservation and really
Speaker 1: around specifically around big cats. So I think my metaverse
Speaker 1: would be focused on really trying to get into sort
Speaker 1: of the the world of conservation and trying to figure
Speaker 1: out how do we bring more awareness and visibility to
Speaker 1: some of the conflicts that are happening in that space,
Speaker 1: with an eye towards generating more sort of crowdsource solutions
Speaker 1: in that area.
Speaker 2: Got some rapid fire questions for you. First is favorite food?
Speaker 1: Oh, I love a good steak.
Speaker 2: Favorite musician or band.
Speaker 1: I gotta go with the classics. Let me go with
Speaker 1: Elton John.
Speaker 2: I think favorite movie.
Speaker 1: You know, I'm not sure this is my favorite, but
Speaker 1: I'm gonna say Toy Story, both because it's a great
Speaker 1: it's a great story, but also just a really amazing
Speaker 1: technology demonstration of the time as the first animated feature film,
Speaker 1: and I think it represents a really pivotal moment in
Speaker 1: the way that we think about filmmaking animation.
Speaker 2: It was way ahead of the time, and it's absolutely
Speaker 2: absolutely as an adult, like my daughter watches sometime and
Speaker 2: I'm like, I sit down, I'm like, man, this is
Speaker 2: so good because I could relate.
Speaker 1: To it so much. Yeah, Yeah, and you kind of
Speaker 1: forget that it's animated or sorry that it's computer animated,
Speaker 1: but then when you go back and think about sort
Speaker 1: of what that took at the time, just a just
Speaker 1: an amazing technical tour de force and a good movie
Speaker 1: to boot.
Speaker 2: Absolutely favorite book.
Speaker 1: Uh you know, I'm I've just started a book that
Speaker 1: I'm actually pretty fascinated called Recoding America Jennifer Paulka I
Speaker 1: think it is, and it's about sort of how digital technology,
Speaker 1: not specifically blockchain, but you know, really how do we
Speaker 1: apply technology into some of the problems that we're seeing
Speaker 1: across society and government and what are the opportunities and
Speaker 1: responsibilities that we have as technologists in that space.
Speaker 2: I'll check that out. And when you're not working a papal,
Speaker 2: what are you doing for fun?
Speaker 1: Like I said, my my other passion is big cats,
Speaker 1: and so I actually volunteer up at a retirement home
Speaker 1: for big cats where we look after folks that animals
Speaker 1: that come out of the entertainment industry or other sorts
Speaker 1: of performance arts and give them a good life after
Speaker 1: they're done with that, to live out their golden years.
Speaker 2: I love that. I'm jealous because I'm a big animal fan.
Speaker 2: I love cats, so that's really amazing.
Speaker 1: Come on buy some time. I'll give you a tour.
Speaker 2: I will definitely take give on that offer. Edwin, absolute
Speaker 2: pleasure chatting with you. Thank you so much. I really
Speaker 2: love what PayPal is doing and I have to have
Speaker 2: you back on because you guys are certainly doing a
Speaker 2: lot of cutting edge things. Thank you so much for
Speaker 2: joining me.
Speaker 1: Thanks for the opportunity. It was great to be here.
Speaker 2: There's eighty thus post eight thus t