PayPal Might be Working on its Own Virtual Currency

Neil Sardesai @@neilsardesai
January 3, 2014

PayPal isn’t exactly a huge fan of Bitcoin. Understandably so, since Bitcoin poses a threat to the entire company. PayPal specialises in online payments, but people can just skip the PayPal middleman with Bitcoin transactions. Simply selling mining equipment on eBay, PayPal’s parent company, can get your account banned. Although PayPal’s president David Marcus stated, “I really like Bitcoin. I own Bitcoins,” he also thinks,

“People are confused. They think because it’s called cryptocurrency it’s a currency. I don’t think it is a currency.”

However, a 2012 patent application from eBay suggests that PayPal might be taking the “if you can’t beat ’em, join ’em” route by offering “gift tokens”. According to the application,

“A gift can be given from a user of a payment provider to a gift recipient…The recipient can be a member of the user’s family, a friend, or any other person or entity. The recipient can use the token to purchase a product using a checkout through the payment provider…A gift or payment instrument can be given from a user of a payment provider, such as PayPal, Inc…The purchase can be made without requiring the user to create the user’s own payment provider account.”

These so-called “gift tokens” would act as a sort of online currency that would not be limited to use with PayPal, probably to encourage more widespread adoption. PayPal is almost synonymous with online payments, so it’s possible that this gift token system becomes successful, if it ever comes out. On the other hand, Bitcoin is the most popular cryptocurrency with the highest value, so it seems unlikely that PayPal’s system would overtake Bitcoin.

Neil Sardesai @@neilsardesai

I enjoy keeping up with the latest stuff in science and technology and have been following Bitcoin for a few years now. I also occasionally post cool stuff on twitter.