The reasons why PayPal decided to invest in Blockchain and the incidence of this technology on identity services are explained in this report.
The international payment-service firm, PayPal revealed its intentions for the Blockchain technology space, after they found in a SEC file that a millionaire amount had been invested in the startup Cambridge Blockchain, a Blockchain technology company.
The CEO of Cambridge Blockchain, Matthew Commons, an entrepreneur with a passion for applying advanced technologies to new fields, said about the development:
“Our service helps in accelerating the compliance with digital identity at the same time as it provides customers with control over their identity information. We feel honored with PayPal’s vote of confidence and we hope to count on their support and guidance.”
CoinDesk informs that neither PayPal nor Cambridge Blockchain has disclosed the investment amount, which was offered during an extension of an A-Series financing round. The total capital raised for almost one year seems to be about US $10.5 million, which includes funds from investors like HCM Capital and Digital Currency Group.
On the one hand, HCM Capital is a venture capital specializing in growth capital investments that seeks to invest in the field of blockchain, digital banking, and artificial intelligence, among others. On the other hand, Digital Currency Group began investing in bitcoin companies in 2013 and provided funding for many of the earliest companies including Coinbase, BitPay, and Ripple.
A PayPal spokesperson said:
“We made an investment in Cambridge Blockchain because they are applying Blockchain for digital identity in a way that, we think, could benefit financial service companies like PayPal. Our investment will allow us to explore possible cooperation to take advantage of Blockchain technology.”
According to the report, Cambridge Blockchain and PayPal have been working very closely to each other since last year. First, the former was one of the newest companies selected in an accelerating program, Fintech Europe 2018, which was sponsored by PayPal, and late in 2018 it started working directly with PayPal’s corporate team in San José, California.
Cambridge Blockchain, a member of the Decentralized Identity Foundation (DIF), is building an identity service based on Blockchain that complies with the Know Your Customer (KYC) and Anti-Money Laundry (AML) regulations to help customers open accounts with financial institutions.
The startup uses Blockchain to store and share information and PayPal may be seeking this service to be more efficient.
As this is PayPal’s first investment in a Blockchain company, it is a very important step that is in accordance with the emerging motif of major established entities that consider adopting Blockchain technology, like The New York Times and their rival payment service, VISA.
Facebook and Microsoft expressed that they are seriously considering the use of Blockchain to manage their identity systems. These organizations are constantly seeking more efficient solutions that guarantee their users’ security, and this technology seems to be an excellent option.
Definitely, development within Blockchain technology has gone beyond cryptocurrency to become an essential part of financial services, as well as social media, which operate on the Web.
By Willmen Blanco
