PayPal officially confirmed on Wednesday that it is entering the cryptocurrency market, and it is joining forces with cryptocurrency firm Paxos Trust Company to provide the service. The migration toward digital payments continues to accelerate, driven by the COVID-19 pandemic and the grown interest in digital currencies from central banks and consumers from all around the world.
Initially, the cryptocurrencies selected are Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH, a spin-off from Bitcoin) and Litecoin (LTC), and the service will be available to PayPal account holders in the U.S. in the next few weeks. Also, the company programs to expand the features to Venmo (the mobile payment service owned by PayPal) and a few chosen international markets in the first half of next year.
As to how it will work, PayPal will convert the crypto into the national currency, so the company being paid will never receive the virtual coins.
In addition to the previous ideas, it is important to highlight that there are no service fees when buying or selling cryptocurrencies until December 31, 2020, and there are no fees for holding cryptocurrency in a PayPal account, so eventually the 346 million active accounts will be able to use cryptos without any economical restriction.
As part of this offering, PayPal will provide accountholders with educational content to help them understand the risks and opportunities related to investing in the cryptocurrency ecosystem, and information on Blockchain technology.
Furthermore, PayPal has been granted a conditional BitLicense by the New York State Department of Financial Services (NYDFS), and PayPal trusts the volatility’s issues of cryptocurrencies as payment methods will be settled using conventional currencies -such as the U.S. dollar-, so it means that the company will be managing the risk of price fluctuations.
Definitely, this decision has the potential of being extremely relevant to the future of the company and, without any doubt, to the development of cryptocurrencies on the years to come.
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