Crypto in PayPal wallet
PayPal has entered the cryptocurrency market, announcing that its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts. Yes, this is true!
"Those virtual coins could then be used to buy things from the 26 million sellers which accept PayPal" PayPal stated.
Dear Europe - stay tuned!
PayPal plans to roll out buying options in the US over the next few weeks, with the full rollout due early next year.
How Bitcoin reacted on the news? Well, no surprises here.
Bitcoin prices rose alongside the news, breaking the $12,000 (£9,170) mark.
The other cryptocurrencies to be added first will be Ethereum, Litecoin, and Bitcoin Cash.
All could be stored "directly within the PayPal digital wallet".
Cryptocurrencies have remained a niche payment method, partly down to the rapid change in prices they can experience compared with traditional state-backed currencies. That has made them popular among some types of investors. Is it however a good option for masses? I believe still a lot of works need to be done to make it widely used.
PayPal said it was aiming:
"to increase consumer understanding and adoption of cryptocurrency".
"As part of this offering, PayPal will provide account holders with educational content to help them understand the cryptocurrency ecosystem,"
And this is the key - people need to understand. Education is crucial, and that strategy seems to make perfect sense.
Media treated that as a "breaking news", but that move is actually nothing new in the finance space. Other payment firms, such as Square's Cash app and Revolut, have already offered cryptocurrencies for sale. What makes it different however, is that PayPal has one of the largest merchant networks in the world.
When it comes to using the virtual coins, PayPal will convert the cryptocurrency into the relevant national currency, so the company being paid will never receive the virtual coins - just the correct amount of pounds or dollars.
PayPal said the system meant there would be
"certainty of value and no incremental fees".
But using Bitcoin to pay at ordinary merchants is not due to launch until
"early 2021".
Fingers crossed that soon we will see more and more companies who move into that direction, increasing the adoption way faster than it is happening now.
