Company committed to rules and can 'ease the minds of regulators', says executive about Indian concerns on digital assets.
Edwin Aoki is passionate about wildlife conservation. When he is not helping efforts to save the tiger, Aoki works as fintech giant PayPal’s chief technology officer for blockchain, crypto and digital currencies.
“We are really benefiting from the huge investment that we've made as a company in our India development teams and centers,” said Aoki in an interview during a visit to the country. “I'm looking forward to growing the work that we're doing dedicated to crypto and our larger efforts and leverage the tremendous talent that we have here in India.”
PayPal has said it supports transferring cryptocurrencies between PayPal and other wallets and exchanges. That feature has been consistently ranked by users as one of the most requested enhancements since the firm began offering the purchase of crypto. The firm allows customers the flexibility to move their crypto assets (Bitcoin, Ethereum, Bitcoin Cash, or Litecoin) into, outside of, and within the PayPal platform.
A cryptocurrency is a medium of exchange, such as the US dollar, but is digital and uses encryption techniques to control the creation of monetary units and to verify the transfer of funds, according to consulting firm PwC. Bitcoin is the best-known cryptocurrency, the one for which blockchain technology was invented. A blockchain is a decentralised ledger of all transactions across a peer-to-peer network. The technology enables the existence of cryptocurrency (among other things).
PayPal first started allowing customers to buy, hold and sell Bitcoin, Ethereum, Bitcoin Cash and Litecoin in late 2020. “We saw an opportunity to address some of the limitations in the financial system through digital currencies and digital payments,” said Aoki, who is based in the US.
For example, a vast number of people who are either under-banked or not served by the normal financial system witnessed delays to get aid via the US government’s Paycheck Protection Program (PPP), a $953-billion business loan programme launched during the pandemic.
“We saw despite some of the best efforts of NGOs, government organizations and private companies like PayPal, there was still a real need to be able to bring greater utility and access to the traditional payments and digital finance,” said Aoki. “We think that in addition to our core product line, digital currencies can make an important contribution to that.”
PayPal has about 7000 employees in India. Guru Bhat, vice president, customer success platform at PayPal, said the country provides innovation and strength. “If you look at the various innovations that PayPal has been able to bring over the last few years, PayPal India has definitely played a pivotal role in that,” said Bhat.
PayPal’s active accounts at the end of the second quarter stood at 429 million, up 6 per cent year-over-year, and this includes 35 million merchant accounts. PayPal’s crypto product is not available in the India market.
There are regulatory challenges in the country. India had previously prohibited crypto trading in 2018, but the Supreme Court overturned the decision in 2020. Finance Minister Nirmala Sitharaman said last month the Reserve Bank of India (RBI) has expressed concern about cryptocurrencies and suggested they be prohibited.
Aoki said that it is true that crypto, like any other financial instrument, can be used as a tool for fraud or criminal activity.
“Through a responsible regulatory regime and actions from players like PayPal that are committed to doing this in a compliant and safe way, we can ease the minds of regulators,” said Aoki, when asked about the Indian regulatory environment.
The opportunity is large as there are 15-20 million cryptocurrency investors in India, with crypto holdings of about $6 billion, according to industry estimates. India was placed second on the 2021 Global Crypto Adoption Index Top 20, behind Vietnam, according to a report by Chainanalysis.
The story first appeared in Business Standard