PayPal has acquired cryptocurrency security firm Curv for an undisclosed amount. Last year, the company had announced the launch of a new service for its customers to buy and sell cryptocurrencies from their PayPal accounts.
Curv is an Israel-based provider of cloud-based infrastructure for digital asset security. The deal is expected to close in the first half of 2021.
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PayPal’s Blockchain Ambitions
Earlier, PayPal had announced its plans to explore the opportunities in digital currencies. To drive this initiative, the company recently created a business unit focused on blockchain, crypto and digital currencies.
The company believes the shift to digital forms of currencies is inevitable and brings many advantages such as efficiency, speed and resilience in payments. Paypal is already a force to reckon with in the field of digital currencies with its digital payment expertise, two-sided network and rigorous security and compliance controls. To further increase consumer understanding and adoption of cryptocurrency, the company introduced the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet.
To further push its growth in the sector, Paypal has been looking to acquire a crypto firm. The company was in talks with BitGo, one of the country’s oldest cryptocurrency firms, but the deal fell through.
“The acquisition of Curv is part of our effort to invest in the talent and technology to realise our vision for a more inclusive financial system,” said Jose Fernandez da Ponte. He is the vice president and general manager, blockchain, crypto and digital currencies, of PayPal. PayPal is also looking to tap Curv’s technical talent, entrepreneurial spirit and the crypto technology.
Curv, a leading supplier of cloud-based infrastructure for digital asset security, currently supports more than 200 coins and tokens on multiple blockchains. The product is regularly pen-tested and peer-reviewed by world-leading cryptographers.
The reasons why Curv can help PayPal fulfil its ambitions are:
Secure transactions: Curve claims to eliminate the private key flaw in the blockchain. By design, blockchain transactions are irreversible, thanks to the public key cryptography they use. This public-key cryptography introduces a single point of failure, i.e. private keys. Curv eliminates this by giving a secure, distributed way to sign transactions and manage all the digital assets. Its proprietary multi-party computation (MPC) protocols allow the transaction to be carried in a secure and distributed way to protect against cyber breaches and other physical damages. It also lets users set up sophisticated policies to stop others from withdrawing crypto assets without some approval chain.
Expand footprint: Since its inception, Curv has been laser-focused on spreading its crypto footprint and offering a broader range of services. It had even partnered with some notable Europe-based crypto firms such as eToro and FalconX to expand its presence. This partnership will help PayPal to utilise these connections and expand its offerings outside the US.
Talent: Curv will bring its strong team of technologists to PayPal and start working on the crypto technologies to help their users to store crypto assets securely and access their wallets without additional hardware. While the cryptocurrency will be available only in the US for now, Paypal also plans to launch new crypto-related products in other countries.
Talking about the deal with PayPal, Itay Malinger, CEO Curv, said, “as the adoption of digital assets accelerates, we feel there’s no better home than PayPal to continue our journey of innovation. We’re excited to join PayPal in expanding the role these assets play in the global economy.”
The demand for Curv’s technology has been high, with the likes of Facebook’s crypto arm, Novi, looking to acquire the startup. However, PayPal closed the deal, which speaks volumes about its focus on developing blockchain technology.