According to Bloomberg, PayPal is shopping around and looking to acquire cryptocurrency companies, including BitGo. Will it be a good fit?
This Thursday, October 22, Bloomberg published a new rumor. Following the announcement, PayPal Holdings Inc, is shopping around and reportedly in talks to acquire BitGo Inc. A deal could finally be reached in the coming weeks.
In fact, the news that PayPal is shopping around and may target BitGo comes a day after the company announced that users can buy and sell cryptocurrencies.
It's true that, BitGo is an American company founded in California in 2013 by Mike Belshe and Ben Davenport. They offer a cryptocurrency storage system that guarantees security. Precisely, in 2018, the company raised $15 million, in a funding round led by Goldman Sachs and Galaxy Digital.
It's worth pointing out that, BitGo is one of the largest cryptocurrency custodians, providing services to the Wrapped Bitcoin project, as well as funds and service providers. Similarly, Galaxy Digital, Goldman Sachs, Jump Capital and other Wall Street and international firms have invested in the company.
Why does PayPal want to acquire BitGo?
The truth is that BitGo offers a number of advantages for which its acquisition would be in PayPal's best interest:
BitGo's headquarters are located in the United States. Since 2013, they have been resident in the country and have had no problems with local regulators.
Initiatives in which the custodian has already been introduced. In August, BitGo applied to New York regulators to become an independent, regulated custodian under the New York State Banking Law.
It is likely that the company acquiring BitGo will enable it to provide custody services to its retail customers. With potentially more institutional customers, looking to venture into the world of cryptocurrencies.
PayPal authorizes cryptocurrencies such as Bitcoin and Ethereum
The company is entering the world of cryptocurrencies. This rumor was confirmed by PayPal itself on October 21. When it was made official that from 2021, its platform would accept the purchase, sale and storage of cryptocurrencies.
Basically, users can buy and sell cryptocurrencies. Including Bitcoin, Ethereum, Bitcoin Cash and Litecoin. As well as using virtual money to buy from the 26 million merchants in its network.
Other partnerships?
In addition, Bloomberg wrote that PayPal is considering partnering with BitGo's competitor, Paxos Trust Company. which is a regulator and provider of cryptocurrency-related products and services.
In this regard, PayPal has partnered with Paxos to offer a cryptocurrency service. A conditional cryptocurrency license must also be obtained from the New York State Department of Financial Services (DFS).
On a curious note, there's still nothing concrete regarding PayPal's purchase of BitGo. Nor how much it would pay if it went ahead with the deal. As a result, negotiations could fail.
I bid you farewell with this quote from Thomas Edison: "The value of an idea lies in its use".
