Online payments giant PayPal has announced that it will officially be joining the crypto markets as it will be offering US account holders the ability to buy, sell, and hold bitcoin (BTC), ethereum (ETH), bitcoin cash (BCH) and litecoin (LTC) in their PayPal wallets. (Updated at 13:01 UTC: updates throughout the entire text).
In the coming weeks, PayPal users in the United States should be able to engage and manage the mentioned cryptoassets on one of the largest digital payments platforms in the world. As of July 2020, PayPal has recorded 346 million active accounts and has processed USD 222bn in the second quarter of 2020.
PayPal is seemingly trialing the move in the US as it has intentions to expand this new service to other countries as well as its digital wallet app, Venmo, in the first half of 2021.
With such a scope of impact, this move might bring digital assets even further into the mainstream, joining the likes of Robinhood and Square in the push for adoption.
“This could lead to next mega-bullrun, simply because millions of people can suddenly use crypto,” entrepreneur, crypto-focused venture capitalist Marc van der Chijs commented.
At the time of writing (12:56 PM UTC), BTC trades at USD 12,405 and is up by 4% in a day, ETH jumped by 3%, to USD 381. BCH and LTC rallied by almost 6%, trading at USD 258 and 50% respectively.
Citing a survey from the Bank for International Settlements, PayPal noted that one in ten central banks are anticipating the launch of their own digital currencies in the next three years, signaling a significant shift toward digital currencies, which holds weight given the current global pandemic and the ever-improving technologies that support cryptocurrencies.
“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,” Dan Schulman, President and CEO of PayPal, was quoted as saying in the press release.
Rumors of PayPal becoming a crypto-player have circulated for some years, however, reports pertaining to the most recent announcement began to surface in the summer of 2020. The announcement comes off the back of approval from the New York State Department of Financial Services (NYDFS), who granted PayPal a conditional Bitlicense, making the firm the first to receive such a license from the NYDFS.
Paxos, the issuer of the Paxos Standard Token (PAX) stablecoin, will be providing PayPal with trading and custodial services. Notably, Paxos was the first to receive a New York Trust Charter to conduct virtual currency business activity, which in this instance, Paxos CEO Charles Cascarilla described as “fitting”.
As reported in July, PayPal confirmed that it had taken “unilateral and tangible steps” to “develop its capabilities” in the cryptoasset area.
“Of particular interest for us is how these technologies and cryptoassets can be utilized to achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services,” they said back then.
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Reactions:
2/ With over 26 million merchants on PayPal’s network, more users and businesses will feel the benefits of using crypto almost immediately when opening in early 2021.
The emphasis on shopping over speculating/investing is in stark contrast to Square, Robinhood, Sofi.
— Shawn Cheng (@shacheng) October 21, 2020
The capitulations to Bitcoin continue apace. And guess what. There are still only 21m Bitcoin. There are 26m PayPal… https://t.co/yqPIk5XFg3
@nic__carter idk this is exciting but… feels like just another asset in a bank / payment network.
One positive outcome of this PayPal news is Square is basically forced to add other cryptoassets now. I can’t wait… https://t.co/B3KrZSNQW0
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Learn more:
PayPal Will ‘Certainly Support’ Crypto Once it Stabilizes
PayPal Rumors Push Bitcoin Higher as On-Chain Transactions Surge
PayPal’s Remittance Crown is Safe from Crypto…For Now