PayPal (PYPL 0.10%) is working on a deal to buy digital-asset security company Curv, according to a report from Israeli news site Calcalist (via CoinDesk). The company, which specializes in the custody and secure storage of cryptocurrency, is expected to fetch a price in the hundreds of millions of dollars, the report said. 

Curv describes itself as "a cloud-based wallet that gives you bulletproof protection, instant availability and total autonomy over all your digital assets, powered by revolutionary cryptography." The company solves a common blockchain problem of "private keys," or the authentication that proves ownership. If this key is lost or compromised, it becomes difficult (if not impossible) for users to gain access to their assets.

A bank of servers in a data center.

Image source: Getty Images.

If the report is true, this would be a logical next step in PayPal's evolution. Late last year, the digital payments icon launched a new service that allows users to buy, sell, and hold cryptocurrency -- including Bitcoin (BTC 3.09%), Ethereum (ETH 1.17%), Bitcoin Cash (BCH 1.62%), and Litecoin (LTC -0.16%) -- directly within their PayPal digital wallet. 

PayPal also announced plans to increase the usefulness of these digital payment methods by eventually allowing it as a payment source for purchases among its 26 million merchants across the globe. At that time late last year, PayPal said that cryptocurrencies had failed to gain mainstream adoption because of the "limited use as an instrument of exchange," but also noted that the shift to digital payment methods was inevitable.

Demand for crypto assets as an investment is surging, and companies including PayPal and Square (SQ -0.42%) are making it easier for users to buy and store cryptocurrency within their respective digital wallets.

Bringing a secure-storage expert into the fold seems like the next logical step for PayPal as it ventures further into the cryptocurrency marketplace.