PayPal announced on Wednesday (21 October) that is now possible to buy, sell, and hold cryptocurrency on its platform.
The service will be globally accessible in 2021 but some users are already able to use this feature on their PayPal account. Initially, this service will support only 4 virtual coins i.e. bitcoin (BTC), bitcoin cash (BCH), litecoin (LTC), and ethereum (ETH).
Once a user buys the coin, it will stay in the account until sold or traded. The payment system does not allow users to deposit or withdraw cryptocurrencies. Previously, users had to go through a third-party gateway (like Binance or Satoshi Tango) to purchase crypto through pay pal. However, now users can perform the same operation directly on the payment system’s platform.
How Cryptocurrency Can Be Used On PayPal System
By early 2021, users will be able to convert their selected cryptocurrency into fiat currency. The company will also extend the support of its digital wallet app, Venmo. For the first time ever, The New York State Department of Financial Services granted PayPal a conditional bitlicense to offer crypto services. The payment platform will partner with an established crypto operator, Paxos until it gets a full license.
The platform is allowing more and more users to start using cryptocurrency as a funding source at its 26 million vendors. Currently, the total number of its users stand at 346 million. One can imagine how many more crypto will attract. It makes this news perhaps one of the most exciting one this year for the crypto enthusiasts.
The company will ensure certainty of value and charge no incremental fees on conversion. Each transaction will settle on fiat currency at ongoing PayPal rates. Moreover, there will no additional integration for vendors as well.
Many other fintech companies like Square, and Robinhood, allow users to buy and sell cryptocurrency. However, PayPal’s endorsement of cryptocurrencies is huge not only because it represents a gigantic market but it also offers a way to minimize the issue of instability, speed and cost that have stalled crypto’s ambition of going full mainstream. The payment company announced to reveal more buying options in the US later.
What The Reaction Has Been?
Enthusiasts and traders have testified that this move will shape how digital payments can play a role in the future of global finance. This is why a lot of experts predicted that cryptocurrency rates will shoot up especially BTC.
This move has made life easier for many users who faced difficulties in holding or trading crypto efficiently
Those who are familiar with platforms other than the popular payment system say otherwise. They opined that it’s not crypto that needed PayPal but it was another way around. By adding crypto in its platform, the payment app has killed the decentralized aspect of the currency. Every currency which has been promoted to money is enclosed in a centralized structure regulated by an authority (like IMF). To some extent, PayPal is facing criticism for putting cryptocurrencies under its regulation.
Experts feel that if users are able to withdraw or transfer their virtual currency, then there is no point for PayPal to allow crypto trading through its platform. It largely indicates a contradiction between laws regarding the use of cryptocurrency and how PayPal is facilitating that usage. Lawyers on social media wanted to discuss this with the legal team of the payment systems.
Majority expected cryptocurrencies to topple the banking system which regulates the wealth of the masses. It was much needed to increase the value of an individual’s contribution in the economy which has been distorted by banks. They have monopolized the only currency which is deemed as money which was unacceptable for various users.
The Bitcoin Still Going Up
Despite the criticism, investors have confirmed that BTC value has risen 5% when the online payment company announced its plans. Currently, the most expensive cryptocurrency, BTC is at all-time high, crossing the mark of 12,000 USD. Here are some nice places to buy bitcoins. Before introducing crypto on its platform, it had a short-lived partnership with Facebook’s Libra Coin as well. Unfortunately, the payment platform let it go last year without disclosing reason.
The company is already backing the idea of universal shift from physical to digital currency in the future. Crypto enables a path to exchange currency between two parties without the involvement of bank or any other financial regulator (or government). Thanks to the pandemic, online payment industry has seen a massive boom. BTC has been highest since pre-pandemic 2019 but still has to achieve its lost glory which was at 20,000 USD in 2017.