PayPal confirms it is rolling out its Crypto ServicesOctober 24, 2020
Last Wednesday, the biggest news in crypto of 2020 finally officially took place – PayPal confirmed it is coming into the cryptocurrency market. This huge payment company with nearly 350 million active accounts across the whole world stated that it is going to make crypto a funding source for individual purchases.
That purchase should become available at its 26 million merchant accounts which also span the world. Not surprisingly, the news immediately skyrocketed the price of BTC token, allowing it to climb more than 500 USD in less than one day. That in turn offered a price of over 13,000 USD and renewed hopes that this is the start of a new bull run.
Other cryptocurrencies, like ethereum, also saw their token price quickly rise. However, at the same time, while this is undoubtedly an injection for the mass adoption of crypto, it comes with plenty of problematic elements. This is especially true when it comes to the way PayPal is planning to roll out the service and which individual elements it is going to offer on its platform.
Present Crypto Features
PayPal will allow its users to buy, sell, and most importantly, hold their digital currencies. The option should be live in a coming couple of weeks, but for some users of the platform, it is already up and running. But, the main element of the present state of crypto functionality will be a big disappointment to many in the community – PayPal will not allow users to withdraw or deposit crypto. Instead, after the user purchases crypto, it will stay on their account until they decide to sell it.
That also implies that other users on PayPal will not have the ability to transfer their coins to anyone else on the platform. For many, this will be the main negative side of the technical characteristics of the PayPal crypto functionality. This is especially true for those who have been holding onto their crypto for years and who would now have the safest option yet to actually sell it for fiat currency. However, most remain hopeful that this is just the first phase of the crypto PayPal development and that it will continue to add new features later on.
Initially, PayPal will offer support for a selection of the biggest cryptocurrencies in the world. Besides the most famous BTC and bitcoin, it will feature BCH of bitcoin cash, ethereum’s ETH token, and litecoin’s LTC. Soon enough, individuals will be free to trade with anyone of these and hold as much as they like on their primary Paypal account. Naturally, all of these cryptocurrencies immediately rallied after this announcement. It follows a range of major institutional investments into bitcoin which took place in recent weeks.
These include Square and its founder, Jack Dorsey of Twitter, to invest 50 million USD into bitcoin. Similarly, MicroStrategy, a tech company founded in 1989 which is publicly traded on the US stock market, also invested 425 million USD of its surplus cash into bitcoin. All of these events mark massive moves forward in terms of crypto acceptance, both institutional and individual. Yet, when it comes to private individuals, the PayPal move is definitely the biggest individual event so far in the history of crypto. This is even more true for the four crypto tokens that will be initially listed on the platform. They can also expect a further push forwards when they are officially rolled out for the public.
The news that PayPal is setting up its crypto operation did not come out of the blue. It was in planning for some time now and the info about that came out in June 2020. Back then, anonymous sources were showing that the platform is creating a setup that would allow it to offer crypto features to its users. This included a deal with the Paxos exchange that would support the payment giant in its cryptocurrency endeavors.
Also, the recent revelation that the company really is coming into crypto was complimented by some insight from Paypal leadership as well. On their official blog, the company explained how the COVID-19 pandemic kick-started a drive to expand all forms of digital payment systems. Along with that, the global crisis of fiat currency and traditional payment mechanisms also played a role in slowly pushing the company towards this potentially huge market.
Of course, the experience of PayPal with cryptocurrencies is not all roses. In 2019, the company was one of a number of business entities that signed up to the Libra project that was developed by Facebook. It was a short-lived initiative which came across a huge range of obstacles, all of which wanted to see the same time – Libra closing down.
They managed to do that along with serious regulatory pressure and now as far as anyone can see, Libra is a thing of the past. However, the negative process clearly did not dismay PayPal from this cryptocurrency-mindful course. Instead, the company decided to wait for its moment with the existing cryptocurrencies. That moment seems to be right now.
2021 and Big Changes
The rollout of the new crypto features on the PayPal platform should be already in early 2021. While some users will get crypto features long before that – or even have them right now – by the next summer, all 340 million users should be able to access them. The limited functionality, mainly in the form of not being able to move in or our BTC tokens users have will remain a problem.
However, in the age of esports, digital streaming platforms, and ever-changing social media, there is a huge likelihood PayPal will add this possibility. The reason for that would be similar to the reasons why it added crypto in the first place – market possibilities and competition pressure. Even now, platforms like Cash App allow users to buy and move crypto. Holding out on that feature would put PayPal in an inferior position compared to those who offer this functionality. That is why chances are good that the same option will appear on that platform at some point as well.