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According to PayPal CEO Dan Schulman, the cryptocurrency industry needs to work closely with regulatory authorities if it wants to stand any chance of surviving.
Speaking at the Web Summit conference, Schulman offered that the industry leaders and the community need to collaborate with financial figures and regulation authorities if cryptocurrency and blockchain-based assets are to see mass-adoption from the public.
Bitcoin and cryptocurrency survival needs foundational regulatory compliance
Discussing a move to a cashless system of payments and a contact-free transaction era in the global market, the PayPal head spoke with Squawk Box host Andrew Ross Sorkin, saying:
“There is only one way to approach this, and that is working hand in hand with regulators. Part of that foundational capabilities are regulatory compliance, full understanding of security, risk management, all of the financial controls, FinCEN controls, AML controls. Without that, you really have no way that you should be in this arena. […] You must have those.”
With PayPal’s’ recent move to launch cryptocurrency support, Schulman has invested time, funds, and energy into receiving regulatory compliance. As the first firm to get a BitLicense in New York, he suggested that any shift to a cashless society needs to have authority backing it for it to be sustainable. His argument which might, in theory, contradict that of Bitcoin s decentralised nature, is that financial authority oversight will help protect users from money laundering and illegal activities. He stated:
“Strong regulatory oversight is extraordinarily important, and I’ve got zero issue with that.”
Schulman’s understanding is that although Bitcoin and cryptocurrencies have been designed to avoid governmental interference, having financial oversight from regulations will offer more peace of mind from investors which will lead to adoption. With more go-ahead from regulatory figures, cautious investors might be more likely to buy into the world of blockchain currencies, which could lead to an overall shift from a cash-based market.