The Writing’s on the Wall — Crypto is Here

The Writing’s on the Wall — Crypto is Here

Recent announcements by PayPal and Asian bank DBS signals that the institutional players are making big forays into crypto. But there is still a big caveat about the PayPal offering.

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My stylist, Cinta, was sitting next to me at the front of the conference. She couldn’t resist the endless foo foo re-touching of my hair. She was just nervous as she is the next scheduled speaker — the owner of San Francisco’s renowned Cinta Salon.

It’s April 2000 and the Viral Marketing Conference is a SF Bay Area who’s who of movers and shakers in the dotcom space. Besides Cinta, other notable speakers included Steve Jurvetson of VC firm, Draper Fisher Jurvetson, and Craig Newmark of Craigslist. Even Apple’s ex-CEO couldn’t make the cut. All the star-powered people want to speak at my conference, said Jennifer Kaplan, the VP of Biz Dev at Gazooba, as she shuffled his index card into the trash pile.

My then girlfriend and future ex-wife picks up a card from the maybe pile and looks at it. She asks, “Peter Thiel, CEO of PayPal. Have you heard of PayPal? What do you think, you fat fuck?” You’ll have to pardon Jennifer’s French after she watches an episode of The Sopranos.

Peter, as it turns out, had the most interesting presentation. He challenged the very notion of money and its means of transmission and creation. After the conference, we had a reception at Circadia. Peter had an even bigger vision of what money could be. A form that is easier to store and to transfer.

A form of money that did not entail the government, or fiat. In other words, there is no reason why money has to be tied or issued by a government. The governments are not the value producers. Quite the contrary, in fact. Peter confessed it was too much to disclose in public.

He explained that [most] people can’t handle that [money]. You can get hauled into the asylum. Or you’ll be exposed to laughter, humiliation, and ridicule by friends and colleagues. Guess who is the billionaire now.

I asked Peter if this money could be considered gold 2.0?

Peter said, yes, but even better. I had to let that one sink in for a minute, maybe 20. I was quiet the rest of the evening.

Nine years later Bitcoin is born in 2009. And ten years after that, a big step for cryptos as PayPal announces that it will accept crypto for all online payments.

Peter is no longer with PayPal, but the company along with Venmo, its payment service, PayPal is effectively the 30th largest US bank. This signifies that the big players are starting to enter into the crypto business and will certainly accelerate crypto adoption and usage.

PayPal was originally part of the Facebook-proposed Libra consortium, along with other institutions like Visa, Mastercard, and eBay, but pulled out a year ago, as the plan was not going to get off the ground. Sounds like PayPal snookered the grandiose-minded Libra as I had predicted that even its watered-down 2.0 version was not going to get off the ground.

The PayPal offering has its own issues. Cryptos in the PayPal platform cannot be transferred out. A “fine” print matter that for some reason few are calling foul!

“You currently are NOT able to send Crypto Assets to family or friends, use Crypto Assets to pay for goods or services, or withdraw Crypto Assets from your Cryptocurrencies Hub to an external cryptocurrency wallet. If you want to withdraw the value from your Cryptocurrencies Hub you will need to sell your Crypto Assets and withdraw the cash proceeds from their sale.”

Then do you really own the crypto? Yes, you do but with obviously some severe restrictions. One can buy cryptos and use it for payment within PayPal, but you can’t withdraw or transfer it to an external wallet.

It leads to many questions under the hood on why PayPal would impose such restrictions. Is it going to really acquire the cryptos for the users, or is this some sort of fractional reserve? Can the internal wallets be transparent or audited by the crypto asset holders? Not that we don’t trust PayPal, but we would still like to verify.

Or is this restriction a holdover from the crypto license granted by the State of New York and is thus a regulatory issue? Is PayPal planning on lifting this restriction later in a 2.0? Or is this PayPal’s scheme to monopolize payments? And if so, wouldn’t it make more sense to issue its own stablecoin for that matter as the volatility of bitcoin is still not ideal. Which means it goes back to the PayPal edition of the Libra. What a web we weave.


Asian bank DBS also announced that it would enter into the crypto exchange business and use its existing banking infrastructure to provide custodial services. There was also an announcement of a new central bank digital currency (CBDC) similar to a Euro for SE Asia. It would be digital of course.

There is a lot of crypto activity going on in terms of regulatory, institutions, startups, DeFi pools, etc. One thing that is safe is to say is that cryptos are progressing ahead, and we are barely out its infancy. With the big players starting to make their moves be on the lookout for future announcements and developments.

And thanks for David Watson of Future Travel in HCMC for pointing out the PayPal restriction to me. I thought I had misheard.


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The Writing’s on the Wall — Crypto is Here was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

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