PayPal investment in digital ID startup shows versatility of blockchain
April 4, 2019
PayPal is the latest financial services firm to jump on the blockchain train.
According to a press release from Cambridge Blockchain, “the two companies will explore potential collaborations to leverage blockchain technology.”
The announcement is significant not only because of the companies involved but also because it underscores the versatility of blockchain and recognizes the various ways the technology can benefit the global payments industry.
Since 2014, Veem has utilized blockchain technology to make payments fast, secure, and cost-effective.
As part of its investment, PayPal is reportedly exploring how it might use Cambridge Blockchain’s platform so users can prove who they are while still keeping personal information from being improperly shared.
9In a statement made to Forbes, a company spokesperson said: “We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including PayPal.”
According to CoinDesk, following “Fintech Europe 2018,” where Cambridge Blockchain was a participant in the accelerator program sponsored by PayPal, the startup began working directly with PayPal’s corporate venture group, which led to the investment.
Unsurprisingly, neither PayPal or Cambridge Blockchain have disclosed the amount invested. However, recent filings with the Securities and Exchange Commission (SEC) indicate that the startup raised an additional $3.5 million since its initial funding round, which totaled $7 million.
Regardless of the sum, the implications of this investment are noteworthy and serve as evidence that for fintech companies, the benefits of blockchain extend beyond just payments.
“Our service helps streamline digital identity compliance while giving customers control over their identity data,” said Matthew Commons, Cambridge Blockchain’s CEO, in a press release. “We are honored by PayPal’s vote of confidence, and we look forward to their support and guidance.”
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What is Cambridge Blockchain?
Founded in 2015, Cambridge Blockchain “returns control of personal data back to users while delivering the benefits of trusted, distributed identity to consumers and organizations.”
The Massachusetts-based startup says that it uses blockchain to deliver strong digital identities at a global scale and meet the increasingly stringent data privacy requirements around the world.
The company has developed a focus on European measures, most notably by working with LuxTrust, which is backed by the Luxembourg government. Cambridge Blockchain’s technology, which is set to launch in Luxembourg later this year, is intended to give residents of the small European country better control over their identities across the internet.
And it just so happens that PayPal’s European headquarters are also in Luxembourg.
The startup is also part of the Decentralized Identity Foundation, which includes Microsoft, Mastercard, and IBM as members, along with many others. The non-profit organization was formed to “establish an open ecosystem of decentralized identity that is accessible to all.”
In the fintech realm, companies may serve different (or competing) purposes and markets, but we all share a common goal of pushing the envelope with innovation.
At Veem, we’re proud to be a part of the drive to spur innovation and competition in this sector. As the first global payments platform to use blockchain, we know that there’s much this technology has to offer the fintech sector — and we look forward to seeing what happens next.