PayPal customers will be able to use cryptocurrencies; allowing customers to buy, sell and hold bitcoin and other virtual coins using the US digital payment company's online wallets at 26 million merchantises on its network starting in early 2021.
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. Cryptocurrencies tend to be volatile, making them attractive to speculators, but a lot less appealing to merchants and shoppers. Transactions have been slower and more costly than other mainstream payment systems. Cryptocurrency payments on PayPal will be settled using fiat currencies, such as the US dollar, meaning merchants will not receive payments in virtual coins.
Many central banks around the world have expressed their intention to develop digital versions of their currencies in the coming years, while Facebook Inc-led the creation of a cryptocurrency project called Libra in 2019. PayPal was a founding member but dropped out after a few months.
Other mainstream finance technology companies, such as mobile payments provider Square Inc and stock trading application firm Robinhood Markets Inc, currently allow users to buy and sell cryptocurrencies, but PayPal's launch is noteworthy given its vast reach.
PayPal has secured the first conditional cryptocurrency license from the New York State Department of Financial Services, and will initially allow purchases of bitcoin and other cryptocurrencies called ethereum, bitcoin cash and litecoin. It has also partnered with Paxos Trust Company to offer the service.
President and Chief Executive Dan Schulman said "We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role."
The company is based in San Jose, California, and has 346 million active accounts around the world and processed $222 billion in payments in the second quarter this year.
Source - Economic Times, Money Control
