Industry News PayPal has chosen the Supplier for its Upcoming Crypto Service

PayPal has chosen the Supplier for its Upcoming Crypto Service

July 21, 2020

In great new follow-up news, it seems that there is little doubt that PayPal is rolling out a cryptocurrency service on its platform. The fintech company is planning to provide crypto trading services to its huge user base, mainly in BTC tokens, as bitcoin remains the doming digital currency in the world. Now, additional news about this matter is pointing towards the choice of partner.

More precisely, the company took on Paxos as the supplier of digital assets that will be used by PayPal. This is amazing news for a New York-based company that just recently launched its new services. This is the Paxos Crypto Brokerage and PayPal is not the only major courtship the business has in store. The other big one comes from Revolut US.

This is the US division of a famous UK fintech company which also offers access to bitcoin trading. Insiders in PayPal, which came in the form of two separate sources talking to CoinDesk, claim that Paxos and the payment giant will formally announce their partnership before the end of this week. The results of this announcement alone are tremendous for the future of PayPal in the crypto domain, as well as the adoption potential for the rest of 2020.

Changing Fintech Landscape

The offering of cryptocurrencies on PayPal would make it the absolute ruler of the field of fintech crypto. Presently, a range of popular companies is already in the cryptocurrency game. It will not be alone in this field, as companies like Robinhood, Square, and its Cash app already offer similar services. However, none will have the sheer market presence of over 320 million individuals who use the same platform. Also, the brand recognition that PayPal brings to the table is second to none in the Western world.

The influence spreads even further, including massive markets like India and in terms of actual users, is rivaled only by Chinese mega-companies like WeChat and their alternatives to fintech platforms. However, having in mind the present level of relationships between the EU and the US on one side and China on the other, there is little chance of things like WeChatPay trying to expand into these markets. So, the position of PayPal seems solidified and the crypto option very well might propel it even further.

Crypto on Offer

Besides the partnership with Paxos, there are many more unknown elements of this emerging story. One of the things that are most interesting to the users in terms of functionality is the offer of cryptocurrencies that PayPal will provide. Paxos was asked this question but the crypto company declined to answer or comment on this. PayPal did the same and has not offered any detailed explanation, but it neither denied the entire story like it appears to be doing since the news broke a few weeks ago.

Since June 22, when the news first came out, it is the hottest topic not just in the crypto community, but also in financial corners, as it shows potentially the biggest step PayPal made in recent years. Naturally, the change from the same market movement will impact the crypto markets as well, but the question is in what capacity.

Paxos Background

The Paxos solution will be an API-based element that will be added to the PayPal platform. It will provide the option of selling, buying, sending, and holding cryptocurrencies. Also, having in mind how hard PayPal works on its regulatory compliance, the same will be done by Paxos as well in this case. It should make sure that all regulatory compliance aspects are taken care of.

This should not be a major issue as the company holds a New York state trust charter and is a qualified custodian. The same means that it is legally allowed to hold both gold and digital assets on behalf of institutional investors. Among the cryptocurrency tokens, it can hold are BTC and ETH, as the biggest networks in terms of price and market cap.

Additional Partner Companies

Paxos is not the only company that is developing a crypto partnership with PayPal. Besides it, there is also the Coinbase. PayPal already has a long-standing partnership with this digital currency exchange and it allowed it to create a transfer system that uses the fintech company solution for moving money in and out of Coinbase accounts. This took place in 2018 so it is no surprise they now, Coinbase has a place inside of the wider PayPal plans.

Experts are expecting that it will provide some sort of white-labeled offering of crypto. Besides Coinbase, there is also Bitstamp. This European exchange is already offering liquidity in crypto tokens to Revolut in the UK. With PayPal, it might also do the same along with Paxos. All of these companies were not accessible for any comment on this story and they declined to participate in any news piece about this ongoing development.

Must-have Tech

The trend that is shown in the decision of PayPal and its rapidly building relationships with the cryptocurrency companies and startups is the fact that it is no longer a fringe domain. Instead, it is quickly becoming a must-have feature of anyone dealing with money on a global level. Companies that have the same feature at their present disposal are showing a climbing revenue from one quarter to the next one. Companies that do not, like PayPal at this moment, have to change that fact as fast as they can.

After all, this offers access to a growing global market. From freelancers in underdeveloped countries to esports players and tech enthusiasts in the developed ones, the number of individuals using crypto is growing rapidly. At the same time, the notion of companies waiting for major institutional crypto investors is no longer relevant, as 2020 showed the level of disruption things like a global pandemic can bring. Instead of any kind of waiting, PayPal understands that the time to act is now. Paxos and other partners will clearly be more than happy to follow it on that journey.

Source: CoinDesk