This Thursday, October 22, Bloomberg has launched a new rumor. After the announcement, PayPal Holdings Inc., goes shopping and would be in talks to acquire BitGo Inc. Ultimately, an agreement could be reached in the coming weeks.
In fact, the news that PayPal goes shopping and possibly BitGo is in the crosshairs comes a day after the company announced that users can buy and sell cryptocurrencies.
It is true that BitGo is an American company founded in California in 2013 by Mike Belshe and Ben Davenport. These offer a cryptocurrency custodian system that guarantees security.
Precisely, in 2018 the company raised $ 15 million, in a round led by Goldman Sachs and Galaxy Digital.
It should be noted that BitGo is one of the largest custodians of cryptocurrencies, which provides services to the Wrapped Bitcoin project, along with funds and service providers. Similarly, Galaxy Digital, Goldman Sachs, Jump Capital, and other firms on and off Wall Street have invested in it.
Why does PayPal want to get BitGo?
The truth is that BitGo has different advantages for which the acquisition of this would be convenient for PayPal:
- The positioning of BitGo’s headquarters in the United States. Since 2013, they reside in the country and have not had any problems with local regulators.
- Initiatives in which the custodian has already been introduced. In August, BitGo petitioned New York regulators to become an independent and regulated custodian under New York State Banking Law.
The firm BitGo acquires is likely to allow it to provide escrow services to its retail clients. Along with potentially more institutional clients, who are looking to venture into this crypto world.
The company enters the world of cryptocurrencies
This rumor was confirmed by the PayPal company itself, on October 21. When it became official that starting in 2021, its platform would accept the purchase, sale and storage of cryptocurrencies.
Basically, users can buy and sell cryptocurrencies. Including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. Thus, how to use virtual money to buy from the 26 million merchants in your network.
Also, Bloomberg has written, that PayPal plans to partner with BitGo’s competitor, Paxos Trust Company. That it is a regulator and provider of cryptocurrency products and services.
In this regard, PayPal is associated with Paxos to offer the cryptocurrency service. Also, to obtain a conditional license for cryptocurrencies from the New York State Department of Financial Services (DFS).
As a curious fact, there is still nothing concrete that PayPal buys BitGo. Nor how much would you pay if you go ahead with the deal. Therefore, the talks could fall apart.
I say goodbye with this phrase from Thomas Edison: “The value of an idea lies in the use of it”.