Both eBay and their child Paypal have come under the spotlight recently in matters related to digital currency. Both have had to deal with awkward moments when setting the record straight in differentiating between currency, digital currency and mining equipment. In so doing, they have walked a tightrope in expressing varying degrees of support for Bitcoin & co.
Indeed, they are likely monitoring developments in digital currency very closely. They are doing their best to take a non-hostile approach to a world that potentially undermines their entire existence. They could eventually be faced with the tough choice of whether to beat them, join them, or some combination thereof.
In an interview yesterday on Bloomberg TV’s Street Smart, John Donahoe, President and CEO of eBay, was posed several questions relating to why eBay should operate together with Paypal instead of parting ways, as major figures like Carl Icahn have been pushing for. The discussion had nothing to do with Bitcoin until Matt Miller brought up the issue:
Miller: “I feel like, by the same token, digital payments like Bitcoin or something similar are clearly going to rule the way we do internet commerce in the future. Wouldn’t you get such a great head start up on that if you could spin off Paypal, take the valuation for it now before something like Bitcoin comes along and makes Paypal useless?”
Donahoe: “Well, there’s nothing that’s holding Paypal back from pursuing digital payments today as part of eBay. In fact Paypal is pursuing digital payments and is the leading digital payments alternative in many different environments. So it’s not a matter of eBay’s holding Paypal back…”
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Miller: “But for now, right, until everyone starts using Bitcoin and there will be no reason to use Paypal.”
Donahoe: “Well you can use digital currencies in the Paypal digital wallet. That’s in fact what Paypal is doing is building a digital wallet that can take multiple types of currency.”
While caught off guard, Donahoe’s reply is consistent with the approach taken till now: following the events closely, not burning bridges with Bitcoin and even developing technology serving similar functions. The big leap would be to fully embrace the cryptocurrency. With its recent flashes of unbridled volatility, lack of regulation and periodic news of fraud and arrests, this won’t happen anytime soon for such companies tightly adhering to the spirit of conventional regulation.
It’s one thing to hold “multiple types of currency”, which is a start, technology-wise. But it’s new ballgame to simultaneously hold cryptocurrencies as opposed to just dollars and euros.
But the indications of satisfying both camps are apparent, especially when using terminology like “digital wallet”.