Paypal to allow users to buy, hold and sell four cryptocurrencies

Daniel Fowler
October 23, 2020

PayPal Holdings Inc joined the cryptocurrency market on Wednesday, allowing customers to buy, sell and hold bitcoin and other virtual coins using the US digital payments company's online wallets.

The latest confirmation from the company detailed that the cryptocurrency services will be available initially only on PayPal and will be extended to subsidiary Venmo by the first half of next year.

What the wallet can not do is accept external deposits, support withdrawals to external wallets, or facilitate digital currency transfers to other PayPal digital currency wallets. In 2018, PayPal competitor and mobile payments provider Square had rolled out support for bitcoin through its Cash app, and earlier this month, Square said that it had bought $50 million worth of Bitcoin.

PayPal hopes the service will encourage global use of virtual coins and prepare its network for new digital currencies that may be developed by central banks and corporations, President and Chief Executive Dan Schulman said in an interview.

The move comes as central banks across the globe are also exploring cryptocurrency, with seven major banks, including the Federal Reserve and the European Central Bank, recently creating a framework for issuing world digital currencies, and the People's Bank of China testing its own digital currency.

Paypal to allow users to buy, hold and sell four cryptocurrencies

The company, based in San Jose, California, has 346 million active accounts around the world and processed $222 billion in payments in the second quarter. PayPal was one of the founding members of the project but then chose to pull out of the project after a few months.

While PayPal's announcement sounds encouraging, there's one big caveat.

It also appears that users will not be able to send cryptocurrency in their wallet to other PayPal users, meaning that all crypto on the PayPal network must stay there.

The new service makes PayPal one of the largest United States companies to provide consumers access to cryptocurrencies, which could help Bitcoin and rival cryptocurrencies gain wider adoption as viable payment methods.

"Bitcoin rose to its highest level in over a year, hitting levels not seen since July 2019 after PayPal said it will enable cryptocurrencies on its platform", noted analyst Neil Wilson at trading website Cryptocurrencies' volatility is attractive for speculators, but poses risks for merchants and shoppers.

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CBS News in a statement called the White House's decision " unprecedented " but said the interview would air Sunday, as planned. Mr Trump responds: "It's not attack, it's defence".

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