The crypto industry is enjoying a great moment as the US payment giant PayPal has stepped into the world of cryptocurrencies. PayPal has announced the launch of crypto services enabling its customers to buy, hold, and sell cryptocurrency directly from their PayPal accounts.
According to the press release published on Wednesday, October 21, initially, crypto services will be launched on PayPal but will be expanded to the company’s social payment platform Venmo by early 2021. To start, PayPal is offering this service to its US customers, then plans to add more geographies and features over time. Bitcoin, Ethereum, Bitcoin Cash, and Litecoin will start the crypto services on PayPal.
To offer these services, PayPal has partnered with Paxos Global to get a first-of-its-kind conditional Bitlicense by the New York State Department of Financial Services (NYDFS). This conditional license allows firms to offer crypto-related services through collaboration with an already registered crypto company, with the expectation that the new firm will eventually seek its own.
According to a separate announcement by Paxos, PayPal will leverage Paxos’ recently launched API-based brokerage service “Paxos Crypto Brokerage” that will handle the regulatory, technological, and liquidity aspects of the crypto features.
PayPal said that it would also provide “accountholders with educational content to help them understand the cryptocurrency ecosystem, the risks, and opportunities related to investing in cryptocurrency, and information on blockchain technology.” Furthermore, there will no service fees for buying or selling cryptocurrency through December 31, 2020, and there are no fees for holding cryptocurrency in a PayPal account.
By early 2021, the crypto holder on PayPal will also be able to use crypto assets as a funding source for purchases at its 26 million merchants worldwide. Crypto assets will instantly be converted to fiat for purchases, without any additional cost. PayPal merchants will have no additional integrations or fees, as all transactions will be settled with fiat currency at their current PayPal rates.
Given the impact of PayPal on the payment landscape, this milestone will further speed up the mass adoption of cryptocurrencies. Charles Cascarilla, CEO and founder of Paxos, wrote:
“For the crypto industry, this news is significant because PayPal can drive increased awareness, education, adoption, and utility for digital currencies. The PayPal global ecosystem has 346 million active accounts (including more than 26 million merchant accounts) and has the potential to significantly influence the size and reach of crypto markets in the years to come.”
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