PayPal Joins Square and Revolut, Supports Trading of Bitcoin, Ethereum, and Two Other Cryptocurrencies
PayPal Holdings Inc, the online payment service catering to the business needs of individuals and businesses, now supports cryptocurrencies in partnership with Paxos Trust Company.
The company has already secured a license from the New York State Department of Financial Services. Clients in their United States can now buy and sell select cryptocurrencies like Bitcoin, Litecoin, Ethereum, and Bitcoin Cash, an update by the financial giant in mid-October said.
Expansion in 2021
The payment platform has over 325 million customers across the globe. While trading of cryptocurrencies is limited to US clients, full buying and trading for select international markets will begin in the first half of 2021. However, the service will expand to Venmo in the first quarter of next year.
At the moment, users cannot send their coins to third-party addresses. However, eligible account holders can store them at in-built wallets and pay for goods and services at any of the 26 million merchants connected to the network. For the avoidance of doubt, merchants will receive payment in fiat, like the USD, and not cryptocurrencies.
PayPal in Promoting Cryptocurrency Adoption
Dan Schulman, the President and Chief Executive of PayPal, said the company was working with central banks. They will also consider other digital currencies and how they can help promote crypto adoption.
Their decision to support virtual currencies considers the disruption of the Coronavirus pandemic and the shift towards digital payment. The changing dynamics also explains the increasing interest in digital assets from central banks and individuals.
Explaining, Dan said:
“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.”
“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption, and interoperability of these new instruments of exchange.”
A recent survey by Mizuho Securities shows that PayPal is already boosting supported cryptocurrencies. Out of the 380 PayPal account holders who participated, 17 percent said they already traded through the platform’s exchange.
Virtual Currencies Have a Combined Market Cap of over $573 Billion
At the time of writing, the total market capitalization of all virtual coins is over $573 billion. The most popular and dominant digital asset is Bitcoin. It has a market cap of $350 billion. Each coin trades at around $18,900, nearly doubling after PayPal made public their plans.
PayPal now joins Cash App by Square and the UK-based Revolut. The Jack Dorsey-led Cash App launched in 2018. Their revenue in Q3 2020 rose 10X quarter-to-year to $1.3 billion generating $32 million in profits.