One of the largest worldwide online payment networks, PayPal, has confirmed today that it is adopting cryptocurrencies and will allow customers to buy, sell and store crypto on the company’s digital wallets starting with the United States.
PayPal Readies to Enable Crypto Payments Worldwide
Earlier today, PayPal Holdings Inc announced it is opening the sluice gates for the cryptocurrency market, enabling consumers to legally buy, sell and store crypto coins using the company’s US online wallets first, and then expanding across the rest of the world.
PayPal customers in specific jurisdictions will be allowed to use cryptocurrencies to make purchases from the company’s pre-approved 26 million merchants starting early in 2021, the company explained in an official statement.
US customers will be able to start carrying out crypto transactions within several weeks, and the company further plans to expand to Venmo.
PayPal’s President and Chief Executive Dan Schulman commented that the move is a precursor towards what PayPal expects to soon become an inundation of central bank digital currencies (CBDC) and other virtual coins created by corporations.
China has been piloting digital currency tests for months now whereas the European Union and the United States have been more conservative in their approaches. Jerome Powell, the chairman of the United States Federal Reserve, has recently commented that the United States is falling behind in the development and adoption of CBDC.
PayPal’s decision to embrace cryptocurrencies comes after extended collaboration with central banks to devise a way for the successful adoption of digital currencies and how PayPal can influence this trend for the better, Schulman explained.
PayPal is not the first entity to think of adopting digital currencies, as other Fintech companies have offered a similar feature. These companies include Robinhood Markets Inc. and Square Inc. but none of these solutions has quite the same pull and reach as PayPal.
Dealing with Cryptocurrency Volatility
While this is a huge announcement from the payment processor, cryptocurrencies price volatility remains an inherent issue that puts off shoppers and merchants from adopting these digital assets more broadly.
To ensure stability, though, the company will use fiat currencies for the final balance, such as US dollars, so that merchants receive payments in a familiar central bank currency and not crypto. Meanwhile, this is not the first time PayPal has flirted with cryptocurrencies either.
Back in 2019, Facebook announced its own cryptocurrency project, Libra, which attracted interest from PayPal. However, the payment processor pulled out of the project in October 2019.
PayPal has already secured a conditional license from New York State Department of Financial Services and will enable support for several crypto assets, including Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.