It's official. PayPal has announced it will allow it's users to "Buy, Sell, and Trade" in Bitcoin, Etherum, LiteCoin, and Bitcoin Cash. What this means is that every one of Paypals current 300 MILLION users will automatically get a Crypto Wallet. One they already know how to use and also means that Bitcoin will be accepted by the over 26 MILLION merchants.
To increase consumer understanding and adoption of cryptocurrency, the company is introducing the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet.
The way it will work is that if you hold Bitcoin in your PayPal Digital Wallet account, you can use that as an option to pay at any merchant that already accepts PayPal normally. The merchant will receive fiat in their native currency. PayPal is handling the transaction and trade from crypto to fiat directly. (much the same way as they current handle inter-currencies purchases) ... it's too early to tell, but they surely will show the exchange rate used, and being such a large 'exchange' they will likely have very competitive rates.
Beginning in early 2021, PayPal customers will be able to use their cryptocurrency holdings as a funding source to pay at PayPal's 26 million merchants around the globe. Consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with certainty of value and no incremental fees. PayPal merchants will have no additional integrations or fees, as all transactions will be settled with fiat currency at their current PayPal rates. In effect, cryptocurrency simply becomes another funding source inside the PayPal digital wallet, adding enhanced utility to cryptocurrency holders, while addressing previous concerns surrounding volatility, cost and speed of cryptocurrency-based transactions.
Another interesting thing to note is their announcement also includes " trade" . So it appears they will act as a centralized exchange as well as broker to fiat for payments. What this means is that you should be able to say exchange BTC for ETH directly within the PayPal Digital Wallet itself. Just as smoothly as if you were to fund your regular PayPal account with a traditional banking transaction.
Hopefully this will make it an even easier way to trade in and our of fiat from cryptocurrency, and is almost certainly going to increase the number of crypto users as soon as it rolls out.
Another interesting development is that to encourage people to adopt and move to their system, PayPal will not have ANY service fee for buying or selling cryptocurrency for the rest of the year. That should mean you could get a better exchange than with the regular exchanges depending on the volume and spread PayPal decides to offer.
There are no service fees when buying or selling cryptocurrency through December 31, 2020, and there are no fees for holding cryptocurrency in a PayPal account.
Paypal has partnered with PAXOS TRUST COMPANY to bring their crypto tech knowledge to create this initiative. So they are using third party developers with a history of success and knowledge in the crypto field. This is a good sign that the rollout will be smooth and with PayPals large financial holding and focus on security, should be a secure and clean environment to participate.
The big news is that no longer will retailers need any special crypto knowledge, (or even be willing to accept crypto as a form of payment) for you to to spend your BTC. They will still receive Fiat and never even know that you funded it with your crypto profits. Your BTC can now be converted into a car on eBay Motors (vanity plate BT-KING), or you can use Crypto as the automatic deduction for your electricity bill. It ALSO means that you can use the existing PayPal Debit card (accepted everywhere Mastercard/Maestro works) and fund it through your Bitcoin to make in-person purchases.
This is a game changer for the Crypto World, and Bitcoin has already risen 4% based on this new. Check it out below and watch as it continues to climb :
