Will You Be Able to Use Cryptocurrency via PayPal?
On October 22, 2020, PayPal took a big step and announced that its customers will be able to buy, sell and hold digital assets on the platform.
Initially, the new feature will be available first in the United States and expected to expand to other countries in early 2021.
At the first moment, PayPal decided to adopt a set of digital assets, such as Bitcoin, Ether, Bitcoin Cash, and Litecoin. To enable the service in the US, the giant fintech company is working together with New York-based Paxos Trust Company.
However, can you purchase Bitcoin and other cryptocurrencies? Let’s see.
PayPal Embraces Cryptocurrency
The company has said it will start by expanding cryptocurrency transactions to US-residents through PayPal’s payment service Venmo. The same features will be offered in other markets in the first half of 2021.
At least initially, no fees will be charged to users who hold cryptocurrency in their PayPal accounts. The new feature required the company to make structural changes, as it has informed that all PayPal’s transaction fees were reset to accommodate the new technology.
Starting in early 2021, PayPal customers will be able to use their cryptocurrency holdings to pay for products and services provided by millions of PayPal-associated merchants worldwide.
PayPal customers will be permitted to convert their cryptocurrencies to fiat currency, with no fixed rates and no fees. In this sense, merchants will have no additional integrations or fees, as all transactions will be settled in fiat currency at current PayPal rates.
Following the announcement, the price of Bitcoin and other cryptocurrencies increased. The market sentiment indicates that the mainstream corporate adoption of blockchain-based solutions will help the crypto industry to mature and reach the masses.
The Purpose Behind PayPal’s Adoption of Cryptocurrencies
According to PayPal CEO, Dan Schulman, the decision was driven by the precipitous decline in the use of cash during the COVID-19 pandemic, followed by the ever-growing interest in cryptocurrencies.
He stated that 40% to 70% of the consumers in the US do not want to handle physical cash anymore, and as every industry starts to become more and more digital, the same tendency was observed in the world of financial services.
In Schulman’s viewpoint, people are flocking to digital payments and digital forms of money. For him, it is not a question of “if”, but a question of “when and how” central banks will start to issue digital forms of currency.
Plus, Schulman stated that more than a solution where people will be allowed to buy, sell and hold cryptocurrencies, PayPal will permit users to utilize their digital assets as a funding source to any transaction on all 28 million merchants associated with PayPal.
Acquisition of Curv
On March 8, 2021, PayPal confirmed the acquisition of crypto security firm Curv. The fintech giant said that Curv will help to expand and accelerate the company's initiatives towards the support of cryptocurrencies.
Curv is an Israeli firm specialized in providing cloud-based infrastructure for digital asset security. Even though the details of the deal were not disclosed, both parties are positive about the future of the initiative.
PayPal made it clear that the company was impressed with the technical talent and entrepreneurial spirit displayed by Curv’s team during the negotiations.
Plus, they were also impressed with the thought process behind the technology build by Curv in the last few years.
Itay Malinger, Curv’s CEO and co-founder, also stated that with the acceleration in the adoption of digital assets, the Israeli company feels that there is no better home than PayPal where they can continue their journey towards innovation.
Custodial Solution – A Bit of Controversy
Despite all the hype surrounding PayPal’s announcement, an initial review of the new crypto- based features reveal that the decision still has a slow-but-steady approach in the adoption of digital assets.
Currently, PayPal’s solution will limit who buyers are, how much crypto they can buy, and what they can do with their PayPal-based crypto.
More importantly, PayPal will not hand over customers’ keys, making the platform fully custodial. According to the company, users will hold the digital assets they bought through PayPal, but they will not have access to their private keys.
Has Crypto Gone Mainstream? – Final Thoughts
In late October 2020, PayPal announced that its users would be allowed to buy, sell and hold cryptocurrencies directly through their PayPal accounts.
Currently, only US-residents (excluding Hawaii) are allowed to buy and sell cryptocurrencies through PayPal’s newest feature, with all trades being executed in USD only. The company plans to expand the service to various global markets in the first half of 2021.
PayPal’s decision has its ground on the growing demand for crypto-based solutions from clients worldwide, especially after the pandemic changed the way people interact with financial services.
Disclaimer: This is a sponsored post, made possible in association with Paybis. PiunikaWeb doesn’t take any responsibility for the product being advertised here.
About Paybis: Paybis is a digital & cryptocurrency exchange established in 2014. With the coverage of 180+ countries and unprecedented 48 US states, you can use Paybis for buying or selling crypto as a private person or choosing liquidity service for business needs.
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