Paypal launches new service to support cryptocurrencies

Paypal account holders in the US will be able to buy, sell and hold Bitcoin, Ethereum, Bitcoin Cash and Litecoin in the coming weeks

Paypal announced yesterday that users would soon be able to buy, sell and hold cryptocurrencies directly within the Paypal digital wallet. The new service will become available to customers in the US in the coming weeks through Paypal’s partnership with Paxos Trust Company, a payment services provider with blockchain expertise.

Paypal’s president and CEO, Dan Schulman, said: “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. We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”

Paypal will initially feature Bitcoin, Ethereum, Bitcoin Cash and Litecoin, and will be offering users educational material so they can learn about blockchain technology and the cryptocurrency ecosystem.

The first ever conditional Bitlicense has been granted to Paypal by the New York State Department of Financial Services (NYDFS). NYDFS superintendent, Linda A Lacewell, said: “NYDFS’ approval today follows our June 2020 announcement for a new framework for a conditional Bitlicense to encourage, promote, and assist interested institutions to have a well-regulated way to access the New York virtual currency marketplace”.

From early 2021, customers will be able to use cryptocurrencies to pay at Paypal’s 26 million merchants around the world, and the company has plans to expand the features to Venmo soon after.

Author of Bitcoin Billionaires, Ben Mezrich, tweeted “Every person who has Venmo now has a bitcoin wallet. This is what bitcoin has been waiting for.”

Venmo had more than 40 million active accounts last year, and in the second quarter of 2020, there were 346 million active Paypal accounts across the globe. So the launch of the new service will potentially introduce hundreds of millions of new people to cryptocurrencies.