In an interview with CNBC, PayPal CFO John Rainey explained that PayPal merchants were wary of cryptocurrencies because of their volatility.
For PayPal merchants, cryptocurrencies are not stable enough to support the viability of their businesses. In fact, the volatile nature of cryptocurrencies proved to be a threat to their businesses.
“If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction.”
“So what happens, or what was happening, is they were immediately moving that to a more stable currency.”
Despite the volatility that comes with cryptocurrencies, many market-watchers still support them. Bitcoin bulls even predict bitcoin value to rise to as much as $50,000.
However, this setback means PayPal will be approaching the space with more caution.
Rainey explained that even if consumers want crypto, if merchants won’t accept it, it won’t account for much. They aren’t closing any doors, though:
“Right now, we don’t see a lot of interest from our merchants. But if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that.”