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Pay Pal ad On Wednesday, it will soon start allowing users to buy cryptocurrency in its app. The news has been hailed as transformative by supporters of decentralized currencies such as Bitcoin.
Bitcoin continued a strong uptrend on the news, reaching annual highs above $ 12,400. Cryptocurrencies available to PayPal users will include Ether, Bitcoin Cash, and Litecoin, in addition to Bitcoin. These currencies also experienced strong rallies this morning.
PayPal joins Square and Robin Hood among mainstream services offering cryptocurrency purchases. Square’s Cash app allows users to buy Bitcoin, but not other cryptocurrencies. Robinhood offers a wider range of digital assets through its stock trading app.
One of the main attractions of cryptocurrency is that, like paper money, it allows an owner to receive, hold, and send money without the involvement of a payment processor, from a bank or other third party. But PayPal’s cryptocurrency service, at least initially, will effectively be limited to purchasing currencies through a third party, Paxos Crypto Brokerage, which actually owns the private crypto keys controlling the crypto tokens. PayPal help documents also state that it unable to send cryptocurrency from PayPal either to other PayPal accounts or to a user’s own cryptocurrency wallet outside of PayPal.
The use of third parties to hold cryptocurrency is widespread and seen as a user-friendly alternative to self-custody, which can be risky and technically difficult.
Despite this compromise, cryptocurrency advocates have hailed the news as a watershed moment, as it will increase public awareness and the perceived legitimacy of blockchain-based digital currencies. PayPal has 346 million users worldwide and processed $ 222 billion in payments in the second quarter of 2020.
Mike Novogratz, founder of the cryptocurrency-focused investment fund Galaxy Digital, described the announcement on Twitter as “the biggest crypto news of the year”.
Crypto purchases will be available to PayPal users in the United States within a few weeks, according to Reuters. PayPal plans to expand its offering to other countries from 2021.
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