Shoppers will be able to use crypto in PayPal’s massive market network.
PayPal is one of the most ubiquitous market networks in the entire world. Most online retailers, and even some physical ones, now have options for secure payment through a PayPal account. The service has also become one of the most common ways to perform non-commercial transactions quickly, still rivaling even its own pay-splitting service Venmo in simple speed and convenience. The only payment service that PayPal does not currently offer is the option to buy and sell products and services using cryptocurrencies like BitCoin. It seems, though, that that is due for a change.
PayPal Holdings Inc. announced today that starting in early 2021, PayPal’s 346 million users will be able to use cryptocurrencies to shop with the 26 million merchants that utilize the service. According to the company’s President and Chief Executive Dan Schulman, the goal of this upgrade is to encourage users to begin using virtual currencies more frequently in preparation for a future where they are far more commonplace.
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he said.
When the update is released, PayPal users will be able to buy and sell crypto directly, as well as hold it in a separate PayPal wallet. However, while crypto can be used to purchase goods and services, those on the receiving end will not receive the virtual currency. Instead, crypto units will automatically be converted to fiat currencies like the US dollar. The volatility of many cryptocurrencies make them less appealing to merchants, so PayPal has chosen this method of payment as a compromise.
PayPal is the first recipient of a conditional cryptocurrency license from the New York State Department of Financial Services. With this license and a partnership with Paxos Trust Company, PayPal will allow its users to purchase several popular cryptocurrencies including bitcoin, ethereum, and litecoin.