Coinbase, The PayPal Of Bitcoin, Eyes Europe As A Potential Hotbed

Fred Ehrsam, the first employee hired by Coinbase, has his eyes on Europe.

The former Goldman Sacks foreign exchange trader said the startup, which functions as a PayPal-like platform for buying, selling and accepting Bitcoin, said that his company, which last week secured a $5 million Series A round of funding, sees a growing demand for the peer-to-peer digital currency in debt-ravaged markets.

“We’re at a pretty unique place right now in global macroeconomics as central banks around the world are taking unprecedented measures that the public is becoming increasingly aware of,” Ehrsam told International Business Times from a windy rooftop in San Francisco. “The media and the market are at a unique stage right now where Bitcoin is a highly poignant idea.”

He pointed to the European Union’s bank levy imposed on deposits of more than $100,000 in Cyprus, which froze ATM withdrawals for days as officials debated the cost.

“All of a sudden people are not only starting to question, ‘what is this dollar bill I’m holding?’ but ‘who has power over it and who ultimately actually controls it?’” Ehrsam said. “In the case of Cyprus, people realized maybe money in the bank isn’t what they thought it was.”

Indeed, searching “Bitcoin” in Google Trends a month ago -- as Bitcoin’s value peaked around $266 -- revealed a heightened curiosity in Europe’s debt-stricken periphery, including Cyprus and Greece.

Finland shot to the top of the list, just below the No. 1 United States, days after news broke that its mobile giant Nokia (NYSE:NOK) saw a 20 percent decrease in quarterly sales and the once-lucrative paper industry was in fast decline.

Right now, Coinbase is limited to U.S. bank accounts, but with the new round of funding, led by Union Square Ventures’ Fred Wilson -- considered a harbinger of startup success after his early investments in Twitter, Zynga and Kickstarter -- the company plans to expand.

“We believe that Bitcoin represents something fundamental and powerful, an open and distributed Internet peer-to-peer protocol for transferring purchasing power,” Wilson wrote in a blog post that announced the investment on Wednesday.

Wilson’s assistant said he was not immediately available for an interview on Monday.

The first step, Ehrsam told IB Times, is to hire more employees.

The 11-month old company said in a blog post that “growth has been heavily constrained” and the new round of hires is slated to stave off the limitations that heavy users face.

“Growth was just so fast it sort of brought our timeline up whether we liked it or not,” Ehrsam said.