"It's a natural evolution given our payments background at PayPal," said Howery. "We were intrigued and spent time trying to get comfortable with questions around regulation but eventually decided to make our first investment in BitPay."
Yet, it's still unclear as to when consumers can expect to be using bitcoins when they make purchases using PayPal. Homeland Security Investigations recently took action to seize the assets of Mt. Gox, the world's leading Bitcoin exchange. Mt. Gox's account was frozen at the request of investigators. The first federal action against the currency isn't a surprise.
Bitcoin advocates have spoken of the currency's potential ability to sidestep government supervision.
"From PayPal's perspective, I assume the management is taking a wait-and-see approach to Bitcoin adoption," Howery said.
Howery should know. He helped raise $90 million in 2001 for PayPal's fifth round of financing, the vast majority of which came from abroad.
"After the stock market crash in 2000, it was hard to raise money in the U.S., so we had to go to groups in the MiddleEast, Asia and Europe for funding," Howery said. As a co-founder of PayPal and partner at Founders Fund, Howery invests in about three new companies a year with typical investments ranging from $2 million to $25 million per company. Every couple of years, the fund he manages with Peter Thiel and two other partners will make bigger re-investments of $75 to $100 million in companies they have already invested in.
"We are focused on breakthrough tech businesses in areas including space, artificial intelligence, robotics and healthcare," said Howery, who invested $12.2 million in ZocDoc in the healthcare IT space and $10 million in SolarCity, the largest full service solar provider in America. The 37-year-old is not your typical red-flag raising venture capitalist.
He met the CEOs of ZocDoc and Domo socially through friends before deciding to invest in their start-ups.
"Our investment in SolarCity came out of what people have dubbed the PayPal mafia due to our relationship with Chairman Elon Musk and his cousin Lyndon Rive who is co-founder and CEO," Howery said. "We invested at the IPO in December and since then, our investment has quadrupled."
Howery is also not your typical shark-like venture capitalist. The CEO of ZocDoc Cyrus Massoumi met Howery at a mutual friend's brunch in New York.
"I am friends with many of the entrepreneurs we fund," Howery said. "At Founders Fund we engage in founder-friendly investing. We've never fired a CEO founder that we back unlike most VCs. We support our founders and they can trust us."
Friendly and innovative Howery's VC tactics may be, but this new vote of confidence in Bitcoin from the "Paypal mafia" gives a peculiar surge of confidence in the crypto-currency just as it comes under added scrutiny.
--Written by Juliette Fairley for MainStreet