21st Oct 2020
PayPal Announces Crypto Payments Solution
Fintech giant PayPal takes the cake for having the biggest news story today with its announcement of the launch of a new service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account. There have been rumors for some time, but now it’s official!
PayPal joins a long list of major players that have recently entered the crypto space.
PayPal’s endorsement of cryptocurrencies is a big deal for a variety of reasons. Not only does it represent an enormous market, but it also offers a way of potentially taming the problems of volatility, speed and cost that have hindered crypto’s mainstream ambitions. By adding cryptocurrencies to its digital wallet, they become just another source of funds.
Here are some fast facts about how PayPal’s new crypto service will work:
- In the next few weeks, users in the United States will be able to buy, hold, and sell cryptocurrencies in their digital wallets, before being able to use them as a funding source at the company’s 26 million merchants beginning in early 2021.
- PayPal will expand crypto support to Venmo in early 2021, as well as additional countries outside the U.S..
- In addition to cryptocurrency payments, PayPal users will also be able to purchase crypto directly through the app. PayPal will thus feature a cryptocurrency wallet, letting users buy, sell and hold crypto via the PayPal apps.
- The coins initially supported will include Bitcoin, Ethereum, Bitcoin Cash and Litecoin, PayPal said.
- PayPal’s service does not allow crypto to be withdrawn or deposited. Once you buy the coins, they stay in your account until you sell.
- The payments will be settled through fiat currencies, similar to many existing crypto merchant solutions like CryptoBucks. This means that merchants will receive fiat, as PayPal will take care of the conversion.
- The news caused the Bitcoin price to soar above $12,800 during trading on October 21. The Litecoin price also surged more than 10%.
- According to a survey by the Bank for International Settlements, one in 10 central banks – representing approximately one-fifth of the world’s population – expect to issue their own digital currencies within the next three years.