According to the CFO of Paypal, it is still necessary to do the settlements in the Fiat currency. He was asked about the future of Bitcoin when it came to Paypal.
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CFO indicates volatility is to Blame:
According to the CFO of Paypal, the main reason why people do not support Bitcoin currently is because of the volatility. There is quite a bit of interest from various merchants for accepting cryptocurrencies. However, due to the volatility, he is not able to provide support for Bitcoin. Bitcoin can easily move up or down by 10% to 15% within a single day. As a result, the merchants will be losing a significant amount of money due to this volatile nature of Bitcoin.
Lightning network of Bitcoin:
The company actually thought of accepting Bitcoin through its solution Braintree in the year 2015. Compared to that time, the volatility in Bitcoin is subdued. Also, according to the CFO, the practice of converting the cryptocurrency into Fiat currency of the transaction will also change pretty soon. As a result, the losses will be minimal for most of the merchants. If the losses of the merchants are minimized automatically the demand for Bitcoin support in PayPal will increase.
With the help of the lightning network, the merchant processors will be charged very little fees. As a result, they will be rewarded for using Bitcoin for doing the transactions. Moreover, there will be real-time transaction processing as well. As a result, it will become much easier for the merchants to deliver the product or the service. The lightning network is currently in the initial stages. It has a capacity of just $US 170,000. That is why, when a payment processor like Paypal starts using it, the entire network will be clogged. This is the reason why they are planning to wait for a longer period of time to ensure that the lightning network can handle the load. Once that happens, it will be easier for them to use the lightning network to provide Bitcoin settlement for the payments which are being accepted by the merchants.
Up until then, it seems like Paypal will wait for Bitcoin to become a better currency by having reduced volatility as well as fewer fees and thereafter only, will think about accepting Bitcoin as a currency during payment processing online.
