PayPal Finally Welcomes Cryptocurrencies

PayPal Finally Welcomes Cryptocurrencies

PayPal has finally decided to embrace crypto and will soon offer its U.S. customers the ability to buy, hold, sell, and use various virtual currencies, having obtained a New York license permitting it to do so — a move long anticipated by crypto enthusiasts, who see an endorsement from PayPal and its sprawling digital wallet network as a means of catapulting cryptocurrencies into mainstream use.

PayPal will support four different cryptocurrencies — bitcoin, ethereum, litecoin and bitcoin cast — together with fintech startup Paxos.

In the next few weeks, U.S. users 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 from early 2021.

The company said it will expand crypto support to its social payments app Venmo in early 2021, as well as additional countries outside the U.S.. 

The New York State Department of Financial Services — which regulates financial services and products —  granted PayPal a “conditional Bitlicense” to offer the service, the first time it has done so, which will allow Paypal to team up with an established crypto operator, Paxos, to provide services until it gets a full license. 

PayPal’s endorsement of cryptocurrencies is huge. Not only does it represent an enormous market — PayPal, and its app Venmo, is one of the world’s largest digital wallet networks —  it 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. 

PayPal’s CEO, Dan Schulman, said the shift to digital currencies “is inevitable” in a press release. He said the company is keen to work with banks and regulators around the world to help shape “the role digital currencies will play in the future of global finance and commerce.”
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