PayPal have announced their acquisition of Curv, a Tel Aviv-based company that uses a novel method of cryptography to protect customers’ Bitcoin and other digital properties. The agreement is the latest indication of PayPal’s growing crypto ambitions, and it sheds light on the company’s strategy for capitalising on the fast-changing financial technology landscape.

PayPal did not reveal financial terms in a press release announcing the Curv contract, but a source close to the firm indicate that it was for nearly $200 million.

PayPal has made a string of recent acquisitions, including $4 billion for coupon service Honey in late 2019 and $2.2 billion for small business payments service iZettle in 2018.

The Curv transaction is PayPal’s first major crypto purchase, and it comes as the company reports strong demand for its service, which was introduced in November and allows US customers to buy and sell Bitcoin and a few other cryptocurrencies.

Curv is one of a growing number of companies that help banks and others secure their crypto holdings from hackers, including Anchorage and BitGo (a business that PayPal considered purchasing last year).

The firm is a pioneer in the use of multi-party computation, or MPC, to protect its assets. Rather than using conventional storage methods, such as spreading the key to a digital wallet in different locations, MPC uses mathematics and cloud computing to avoid unauthorised access.

All of this means that it will only be a matter of time before government-backed digital currencies become commonplace. PayPal’s recent crypto investments will help the company play a key role in providing the next generation of financial plumbing between merchants and customers if this happens.