Luke Nosek, one of PayPal’s co-founders, was talking at the World Economic Forum in Davos when he revealed that the firm initially wanted to develop a digital currency that was independent of banks and governments.
Nosek was part of a panel when he was asked if PayPal or WeChat, the app-based payment and messenger service system that dominates the Chinese market, has solved the problems associated with online transactions, or if cryptocurrencies were another solution.
In response, PayPal’s co-founder said, “Many people don’t know this, but the initial mission of PayPal was to create a global currency that was independent of interference by these, you know, corrupt cartels of banks and governments that were debasing their currencies.”
PayPal has become a powerhouse in online payments, but it didn’t achieve its initial goal, because as it grew it became more centralised, and also developed such strong relationships with Visa, Mastercard and SWIFT that it was obliged to do what these institutions wanted rather than follow its digital currency idea.
Nosek said, “PayPal is obliged to do whatever it needs to do to keep those institutions happy, and we’ve learnt to play.”
Nosek, who is a close friend of Elon Musk, another PayPal co-founder, is also on the Board at Musk’s SpaceX. He told the audience that both he and Musk regret not having the time to develop something similar to a decentralised cryptocurrency. He attributed the failure to pressure from investors who wanted PayPal to launch quickly.
He paid tribute to Bitcoin and Ethereum developers and said that he hoped they would never have the same pressure from investors as PayPal did.
PayPal, which had 254 million users at the end of Q3 in 2018, recently launched a blockchain-based, employee reward system where employees are given tokens for participating in innovation-related programs and contributing ideas, and can exchange them for over 100 “experiences” within the company.