Paypal – the global payments giant – announced they will be adding support for cryptocurrencies on its platform. Users of Paypal will be able to purchase and hold their crypto-assets in their Paypal wallet starting in early 2021.
Today, we are announcing the launch of a new service that will enable customers to buy, hold and sell #Cryptocurrency directly from their PayPal account. https://t.co/QS6JRmG9hs pic.twitter.com/uHBatfZkbF
— PayPal (@PayPal) October 21, 2020
In order to provide access to crypto assets in a compliant manner, Paypal has secured the first conditional cryptocurrency license from the New York State Department of Financial Services. The first cryptocurrencies that will be available for purchase on Paypal include Ethereum, Bitcoin, Litecoin, and Bitcoin Cash.
Representatives from the company have also confirmed that they plan to expand this crypto service to their peer-to-peer payment app Venmo as well. This move makes Paypal one of the largest US-based companies to offer consumer access to cryptocurrencies, with 346 million active accounts around the world. Purchase and self-custody of crypto assets have always been a barrier for mass adoption, meaning Paypal brings expertise and a scalable UI that’s ready to be introduced to the cryptomarkets. While we are still months away from the launch of this new functionality, news of Paypal’s move towards crypto has already had a significant impact on the crypto community.
While the news has been overall bullish for Bitcoin price movement, we must note that withdrawals and transfers of crypto assets on Paypal will be prohibited. It’s unclear if users will be given the optionality to withdraw and self-custody their assets in the future, but it’s quickly becoming a major point of discussion.
On one hand, you have folks making a very valid point that crypto assets purchased on Paypal will not truly belong to the user. This inability to self-custody goes against the very ethos of Bitcoin.
Look, I understand the temptation to just be excited about PayPal & ignore the fact that they prohibit transfers to other accounts & withdrawals to self-custody.
But if you can't hold your own keys, is it even Bitcoin?
How much will we sacrifice in the name of "number go up?"
— Jake Chervinsky (@jchervinsky) October 21, 2020
On the other hand, supporters of the Paypal move would argue that your parents and grandparents aren’t going to master LEDGER & Metamask, the services Paypal is providing will be essential if we ever want the masses to get comfortable with the idea of digital assets.
PayPal is an important bridge between the mainland and the island of crypto. The diaspora from legacy finance is happening and this is the kind of infrastructure that will help make that happen. Soon there will b a flippening and crypto will b the mainland & fiat the island ?? ??
— Tyler Winklevoss (@tylerwinklevoss) October 21, 2020
In the end, only time will tell who was right. Keep up with the latest on Paypal through their Twitter.
Business Development and Operations at TrustToken – TUSD. Jack is a startup generalist and DeFi enthusiast. Stay connected with him by following @HHJackSun on Twitter.
