PayPal Holdings, Inc. has announced the launch of its newest service. This service will allow users to now be able to hold, buy and sell cryptocurrency directly from their PayPal accounts. Yes, including Bitcoin. Cool right?
The e-commerce company will be enabling cryptocurrency as a funding source for digital commerce and purchases at its 26 million merchants across the globe.
The ongoing Coronavirus pandemic, has resulted in a heightened interest in crypto or digital currencies, and an accelerated shift towards digital representations of value, alongside digital payments.
In the past the adoption of cryptocurrency by the mainstream or the general public, has been restricted by their limited use in regards to being an instrument of exchange due in fact, to the speed and costs of transacting via cryptocurrencies, and their volatility. With the promise of technological platforms that are more enhanced, the possibility of making digital currencies mainstream and more popular, is becoming more realistic.
A survey conducted by the Bank for International Settlements revealed that 1 in 10 central banks (which is essentially one-fifth of the world’s population), expects to issue their very own cryptocurrencies or digital currencies within the next three years.
The President and Chief Executive Officer (CEO) of PayPal; Dan Schulman, said, “The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly.”
He added that, “Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange. We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
In an effort to increase its consumers adoption of cryptocurrency and of course their understanding, PayPal as already stated, will be making possible for its users to hold, buy, and sell cryptocurrencies (including Bitcoin, Litecoin, Bitcoin Cash, and Ethereum), from their comfort of their PayPal digital wallets. Although the service is currently only available to PayPal accountholders in the United States (U.S.), PayPal will be rolling out the service to select international markets in the first half of next year; 2021. It will also be expanding said service to Venmo as well, in the same period.
This service is operational in the United States (U.S.) through a partnership with Paxos Trust Company which is a regulated financial institution building infrastructure to enable movement between physical and digital assets, and also a regulated provider of cryptocurrency products and services.
The New York State Department of Financial Services (NYDFS) granted PayPal a first of its kind conditional Bitlicense.
PayPal will also be providing all its eligible account holders with the necessary educational content to help them properly understand the cryptocurrency ecosystem, understand the opportunities that come with investing in cryptocurrency, know the risks that come with investing in cryptocurrency as well, and additional information regarding the Blockchain technology.
Accroding to PayPal’s Official website, there will be no service fees when you buy or sell Cryptocurrency via PayPal until December 31st 2020. There are also no fees whatsoever, for keeping Cryptocurrency in your PayPal account.
From the first quarter of 2021 PayPal users will be able to use all cryptocurrency in their PayPal accounts, to pay for good and services at PayPal’s 26 million merchants all over the world. Users will be able to convert their crypto, to fiat currencies like Euro, Pound, Dollar, etc, with the proper values and the absence of any incremental fees.
PayPal merchants likewise, will not need pay any additional fees, or carry out additional integration processes. This is because all transactions will be settled via fiat currencies at their PayPal rates.
What this means is that users’ cryptocurrency will just be another funding source inside their PayPal digital wallets, giving it improved utility and also effectively solving the usual fears regarding volatility, speed of cryptocurrency-based transactions, and the cost of said transactions. Think of it as how you can link your card to your PayPal account. Easy right?
PayPal has also through its internal blockchain focused research team, been studying the potential of digital currencies via strategic alliances and partnerships with a number of central banks and regulated cryptocurrency platforms around the world. As a result, it has increased its resources and its focus on further exploring the infrastructure of next generation digital financial services and all improvements to digital commerce.
For instance, PayPal Ventures which is the company’s venture capital side, invested in TRM Labs in 2019. TRM Labs, is a company that is focused on aiding financial institutions in the prevention of financial crimes and cryptocurrency fraud. In the same year it also invested in Cambridge Blockchain; which is an identity management and compliance software company that is based on Blockchain.
The e-commerce company; PayPal, has made it known that it will continue to study and explore the immense potential of distributed ledger technologies with regards to improving financial services, making them more affordable, and making them more secure. It will also be working closely with various governments, regulators, and Central Banks.
For over 20 years, PayPal has stayed at the forefront of the digital payment space, through its use of ever-changing technology to make financial services and commerce much more convenient, affordable and secure. Its platform is available in over 200 markets across the globe.
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