PayPal Holdings Inc. (NYSE:PYPL) is foraying into the cryptocurrency market by allowing its customers to buy and sell cryptocurrencies through their PayPal accounts. Customers can also hold bitcoin and other digital currencies in their online wallets.
PayPal is introducing cryptocurrencies to its users
Users can spend their virtual currencies to make purchases on over 26 million merchants on the PayPal network that accept PayPal. The company is planning to launch the US purchase option in the coming weeks, with the rest of the world expected to enjoy the offering from early 2021. PayPal will expand the offering to Venmo next year.
The move aims at encouraging the adoption and use of cryptocurrencies globally. Dan Schulman, the company’s CEO, said that the service is also preparing the PayPal network for the new central bank digital currencies expected to launch soon. He said that the company is working with central banks and has all digital currencies in mind and how they can integrate them into the network.
Among the first digital currencies PayPal will add to the service include Litecoin, Ethereum, and Bitcoin Cash. PayPal said that all the coins will be stored in one’s digital wallet. Digital coins are a niche payment method, which is partly due to the volatility in prices compared to fiat currencies. This has made them a popular investment option to speculators by merchants and shoppers; they are less appealing. Their transactions have been costlier compared to other mainstream systems.
Cryptocurrency adoption growing
PayPal aims at increasing consumer understanding and the adoption of digital currencies. As part of the launch of cryptocurrencies, the payment provider will offer educational content to account holders to understand the cryptocurrency ecosystem.
Already cryptocurrencies are gaining traction with fintech companies such as Square Inc. and trading app company, Robinhood Markets permitting buying and selling of crypto. The launch by PayPal is a massive step considering its reach. The company has 246 million active accounts globally, and in Q2, it processed around $222 billion in payments.