PayPal has posted strong Q1 results in 2021, retaining its momentum from 2020 and benefiting from crypto investment.
Crypto Boosts PayPal Results in First Quarter
Investment in cryptocurrencies and blockchain has been impactful to the point where Tesla, a carmaker of electric vehicles, turned more in profit off its $1.5 billion Bitcoin investment in a few months than it did in an entire year of car sales. On Wednesday, PayPal, another company Elon Musk helped build, announced its first-quarter results for 2021.
As expected, revenues continued growing, a trend that started with PayPal announcing support for cryptocurrencies back in October. Revenue in Q1 2021 stood at $6.03 billion with payment volume increasing from $277 billion in Q4 to $285 billion in Q1, probably buoyant on the newly-introduced features to carry on purchases with cryptocurrencies.
Investing in crypto is hardly all that has contributed to a successful trade day for PayPal, with the pandemic driving e-commerce up and pushing consumers to more digitalized forms of purchases. Another 14.5 million accounts joined the platform in Q1, with 1.5 million merchants setting up shop.
PayPal Wants to Be a “Super App” for Crypto
PayPal’s expansion into cryptocurrencies has not been tamed either. The payment processing giant now offers support for Bitcoin and Ethereum transactions and it has been actively looking to acquire more crypto assets, including the peer-to-peer Venmo app and Curv, a digital security firm with a focus on crypto space.
PayPal CEO Dan Schulman acknowledged that the expansion of cryptocurrencies and central bank digital currencies (CBDCs) is an opportunity for new business venues, explaining:
“Both cryptocurrencies and central bank issued digital currencies can play a critical role in shaping a more inclusive recovery and a more equitable financial system.”
As PayPal expects regulation and adoption of digital currencies to vary from one country to the next, Schulman is more interested in turning PayPal into a “super app” that is prepared to cater to both government and consumer-specific needs in future.
In April, SEC commissioner Hester Pierce put forward her “Safe Harbor Proposal” in a bid to facilitate the adoption of crypto in mainstream finances. At the same time, China is already close to launching a fully-fledged digital yuan, which will be the first mass CBDC in the world.