Despite over a year of intense press attention, tens of millions of dollars in venture capital investment, and the adoration of a devoted user base, the digital currency Bitcoin is still well off its all time high price of over $1,100, resting at $661 for one bitcoin, according to Coinbase. That could change if a major merchant or payment processor starts to accept the digital currency and eBay's CEO John Donahoe hinted that may soon be the case. PayPal is the payments subsidiary of eBay.
In an interview with Andrew Ross Sorkin on CNBC, Donahoe said, "I think there's no doubt digital currency is going to play an important role going forward, and at PayPal, we're going to have to integrate digital currencies into our wallet."
So far, the largest merchant to allow customers to pay with Bitcoin is Overstock.com, run by the iconoclastic Patrick Byrne, who told Wired, "We want a money that some government mandarin can't just whisk into existence with a pen stroke." The satellite TV network Dish also announced last week that it would begin to accept Bitcoin later this year.
"I think you'll see Bitcoin used in different use cases, whether it's a peer-to-peer use case, a cross-border transaction, someone's sending currency to someone else," Donahoe told Sorkin. "And over time, you'll start to see it with some merchants accepting Bitcoin."
In the first three months of this year, PayPal processed transactions worth $52 billion, about $570 million per day. According to Blockchain, the most recent estimated data on Bitcoin transactions per day puts it at about $71,388,000, meaning that even a small portion of PayPal's business being done in Bitcoin would vastly increase the transaction volume for the entire digital currency, likely driving up the price. Donahoe also said he owned some Bitcoin in order to "understand how it can be used."
"I don't know how big it will get how quickly," Donahoe said. "But the underlying theme is that a digital currency is something we're aware and something we should be paying attention to."
Matthew Zeitlin is a business reporter for BuzzFeed News and is based in New York. Zeitlin reports on Wall Street and big banks.
Contact Matthew Zeitlin at firstname.lastname@example.org.
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