PayPal makes major crypto move with launch of new service
PayPal customers will from early 2021 be able to use cryptocurrencies to shop at the 26 million merchants on its network.
The company will also allow people to buy, sell and hold Bitcoin and other virtual coins using its online wallets.
The initial focus will be on Bitcoin, Ethereum, Bitcoin Cash and Litecoin. The service will be available to PayPal account holders in the US in the coming weeks. Plans are afoot to expand this to Venmo and select international markets in the first half of 2021.
"The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly," says Dan Schulman, President and CEO, PayPal.
"Our global reach, digital payments expertise, two-sided network, and rigourous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.”
He adds: “We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce."
Only a matter of time
PayPal’s crypto move should come as no great surprise, according to Danny Scott, CEO at UK Bitcoin exchange CoinCorner.
“Earlier in the summer, they announced that they were looking at the option, having dropped out of the Libra association a little over a year ago,” he comments.
One of PayPal’s competitors in the US, Square, had seen revenue of $306 million in Q1 2020 surpassing its fiat revenue stream by around $100 million, he adds.
“By the sounds of the functionality, PayPal’s service is very basic, meaning that it’s a closed loop - aka, you can’t withdraw your Bitcoin and use it elsewhere, or send your Bitcoin from outside of PayPal into their system,” Scott says.
Nonetheless, the announcement is a positive step forward for the crypto industry, and brings more credibility to Bitcoin and its future prospects, he concludes.
