Popular online payments system PayPal announces entry into cryptocurrency market, in a move that may draw regulator scrutiny
PayPal has confirmed its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts.
The announcement from the online payment service said that the move was helped by increased interest in digital currencies from central banks and consumers, accelerated by the Coronavirus pandemic.
It should be noted that PayPal was formerly a partner in Facebook’s digital currency Libra, but it became one of the first of a number of financial firms to withdraw from the controversial scheme.
Indeed, Facebook earlier this year confirmed it was ‘rethinking’ its plan for Libra, and no longer intended to make the Libra token.
The Libra token was the actual blockchain-based cryptocurrency that Facebook had been in the process of developing in partnership with the Geneva-based Libra Association.
But now PayPal has launched its new service enabling its customers to buy, hold and sell cryptocurrency directly from their PayPal account.
And it signaled its plans to significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide.
“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” said Dan Schulman, president and CEO, PayPal.
“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange,” said Schulman.
“We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce,” he concluded.
PayPal said it would introduce the ability to buy, hold and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet.
The service is expected to be available to PayPal account holders in the United States in the coming weeks.
PayPal has also been granted a first-of-its-kind conditional Bitlicense by the New York State Department of Financial Services (NYDFS).