With 346 million active user accounts globally, PayPal’s announcement that it will enable its users to buy and sell crypto is huge. But PayPal’s intent to enable crypto to be accepted at PayPal’s 26 million merchants is arguably even bigger news.
The ability for PayPal users to buy, hold, and sell crypto increases the opportunity for individuals to invest, but when PayPal users have the ability to pay for goods and services at PayPal’s 26 million merchants, crypto might actually become more like traditional currencies. Wide acceptance is critical and has been one of the hurdles holding back the broader use of crypto. It will be interesting to see how other networks and acquirers react to this crypto news.
Here’s more coverage from a Futures Magazine article:
“Yesterday, PayPal announced their intention to launch a feature for buying, selling, and being a custodian for several cryptos for U.S. customers while also allowing customers to use crypto to make purchases with merchants integrated with PayPal in 2021 when a global rollout is expected. This is one of the most impactful corporate announcements in the space in some time.
The new feature, which will offer services in BTC, ETH, BCH and LTC, will become available ‘in the coming weeks’ according to PayPal. In an interview with Reuters, the firm’s CEO Dan Schulman said the new service is meant to encourage the global uptake of crypto and to prepare its network of users and merchants for new ‘digital currencies’ that may be developed by central banks or corporations. Schulman said PayPal is ‘working with central banks and thinking of all forms of digital currencies and how PayPal can play a role.’
Overview by Tim Sloane, VP, Payments Innovation at Mercator Advisory Group