PayPal goes shopping: Want to get BitGo?

According to Bloomberg, PayPal is out shopping and looking to acquire cryptomoney companies, including BitGo. Will this be convenient?

This Thursday 22 October, Bloomberg has launched a new rumour. Following the announcement, PayPal Holdings Inc. is out shopping and would be in discussions to acquire BitGo Inc. Ultimately, a deal could be reached in the coming weeks.

In fact, the news that PayPal is out shopping and possibly targeting BitGo, comes a day after the company announced, that users can buy and sell crypto currencies.

True, BitGo is an American company founded in California in 2013 by Mike Belshe and Ben Davenport. They offer a crypto coin storage system that guarantees security.

In 2018, the company raised 15 million dollars in a round led by Goldman Sachs and Galaxy Digital.

It is necessary to highlight that, BitGo is one of the largest cryptomoney custodians, which provides services to the Wrapped Bitcoin project, together with funds and service providers. Galaxy Digital, Goldman Sachs, Jump Capital and other firms on and off Wall Street have also invested in it.

Why does PayPal want to get BitGo?

The truth is, BitGo has several advantages that make it convenient for PayPal to acquire it:

  • The positioning of BitGo’s headquarters in the United States. Since 2013 they have been resident in the country and have had no problems with local regulators.
  • The initiatives in which the custodian has already been introduced. In August, BitGo applied to the New York regulators to become an independent, regulated custodian under New York State Banking Law.

It is likely that the firm that acquires BitGo will allow it to provide custodial services to its retail customers. Along with potentially more institutional customers, who are looking to venture into this cryptic world.

The company enters the world of crypto-currency

This rumour was confirmed by the company PayPal itself, on October 21st. When it was made official that as of 2021 its platform would accept the purchase, sale and storage of cryptomoney.

Basically, users can buy and sell crypto currencies. Including Bitcoin, Ethereum, Bitcoin Cash and Litecoin. So, how to use virtual money to buy from the 26 million merchants in your network.

Other partnerships?

Also, Bloomberg has written, that PayPal plans to partner with BitGo’s competitor, Paxos Trust Company. Which is a regulator and provider of crypto currency products and services.

In this regard, PayPal is partnering with Paxos to offer the crypto currency service. Also, to obtain a conditional crypto coin license from the New York State Department of Financial Services (DFS).

Interestingly, there is nothing concrete yet about PayPal buying from BitGo. Nor, how much it would pay if it went ahead with the deal. Therefore, the talks could fall apart.

I leave with this sentence by Thomas Edison: „The value of an idea lies in the use of it“.

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