In an apparent first global online payments company, PayPal has made an investment in a blockchain startup that focuses on leveraging technology to give users more control over their digital identities. The news was reported by Forbes on April 2.
The investment is part of an extension of a round of financing of the Series A in the startup, called Cambridge Blockchain, which raised a total of USD 7 million for the first time in May 2018.
The size of the investment hasn’t been revealed
Although neither PayPal nor Cambridge Blockchain have revealed the size of the investment of the giant of the payments, the recent presentations before the Commission of Values and Bag of the United States reveal that Cambridge Blockchain has raised USD 3,5 million in fresh capital in the course of the nine months since May 2018.
According to Forbes, the Cambridge Blockchain Series A of May 2018 had included the participation of the venture capital firm Digital Currency Group, the venture capital arm of the Taiwanese manufacturer of iPhone Foxconn and the technology investment company Partech Ventures.
Still, a huge expansion
The USD 3.5 million for the expansion of the Series A include a new investment by the self-styled investment philanthropic company Omidyar Network, together with PayPal.
With respect to PayPal’s foray into digital identity management driven by a blockchain, Forbes cites an anonymous PayPal spokesperson that states the following:
“We made an investment in Cambridge Blockchain because it is applying the blockchain for digital identity in a way that we believe could benefit financial services companies, including PayPal”.
Cambridge Blockchain has notably joined major players such as Microsoft, IBM, MasterCard and Accenture to collaborate under the auspices of a non-profit organization called the Decentralized Identity Foundation.
PayPal, with the focus on blockchain
Despite the wide range of digital identity projects driven by blockchain from Cambridge Blockchain, PayPal will focus its blockchain exploration for financial applications, the spokesperson reportedly said.
According to Forbes, Cambridge Blockchain will use the A Series and the financing of the extension in research and development, as well as the expansion of its workforce in Boston, Paris and Beijing, the latter with a view to developing a series of projects together with Foxconn.
A little bit of background
Forbes notes that Cambridge Blockchain CEO Matthew Commons collaborated with PayPal for the first time as part of the co-hosted accelerator of Fintech Europe 2018, which focuses on helping startups deal with the rigorous privacy framework of data from Europe: the General Data Protection Regulation.
PayPal co-founder Luke Nosek recently commented that the company had initially aimed to create a digital currency that was independent of banks and governments, similar to a crypto.
PayPal, whose active number of users exceeded 254 million in the third quarter of last year, launched a blockchain-based rewards system for its employees in December 2018.