E-commerce giant eBay is building a digital wallet for multiple types of currency, complementing its payment system PayPal, which is said to be facing threat from increasing popularity of virtual currencies such as bitcoin.

In an interview with Bloomberg, eBay CEO John Donahoe said that digital currencies can be integrated into PayPal and are not posing threat to his business.

"There is nothing holding PayPal back from pursuing digital payments today, as part of eBay. In fact PayPal is pursuing digital payments and is the leading digital payments alternative in many different environments," Donahoe said.

"You can use digital currencies in the PayPal digital wallet, that's in fact what PayPal is doing – is building a digital wallet that can take multiple types of currency."

Earlier eBay had allowed users to buy and sell digital currencies such as bitcoin on its UK website. Bitcoin owners may list on the site's classifieds section, allowing the buying and selling of the cryptocurrency.

The online retailer previously allowed users to sell software for bitcoin mining and transactions. It is yet to accept the digital currency as a form of payment.

No PayPal Spin Off

Donahoe also dismissed activist investor Carl Icahn's calls for a spin-off of its PayPal business into an independent company.

Donahoe noted that PayPal is stronger as a unit of the online marketplace, as both benefit from the convergence of commerce and payments.

"I continue to believe the best way is together - that eBay makes PayPal stronger. And it makes PayPal stronger by helping it grow faster. It provides more data and it provides a strong financial foundation that will ultimately make PayPal more successful as part of eBay than separate," he said.

The PayPal business has recently witnessed significant growth and is expected to generate more revenues than the online market place in the near future.