PayPal joins the big list of institutions that are boarding the cryptocurrency train. The giant payment processor will allow users to buy, sell, and hold virtual coins including bitcoin using the company’s online wallets according to a Reuters report.
PayPal users will be able to use cryptocurrencies to buy products from 26 million merchants that accept PayPal payments. This will start at the beginning of 2021, the company said in an announcement.
With the race of central banks to issue digital currencies PayPal hopes to prepare its network for the new digital era accepting cryptocurrencies, President and Chief Executive Dan Schulman said in an interview.
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he said.
For the U.S. PayPal users, the new options to buy, sell and hold cryptocurrencies will be available in the coming weeks. PayPal aims to expand their options to Venmo and other countries in the first half of 2012.
PayPal is not the first Fintech company to allow cryptocurrencies in their network. Square and Robinhood Inc allow its users to buy and sell cryptocurrencies, but the news of Paypal allowing cryptocurrencies is huge news because of the large reach the giant payment processor has.
Paypal has 346 million active accounts and has processed 222 billion dollars just in the second quarter this year.
However as the company said, due to the volatile nature of cryptocurrencies, crypto payment via PayPal will be settled in fiat, which means that merchants will not receive cryptocurrencies when getting paid but will receive fiat currencies.
PayPal was also a founding member at Libra, the Facebook coin that did not see the light of the day yet, however, PayPal dropped the project some weeks after having joined it.
PayPal, which has obtained the license from the New York State Department of Financial Services, will initially allow acquisition of Bitcoin, Ethereum, Bitcoin Cash and Litecoin declared the company.
Paypal has partnered with Paxos Trust Company in order to offer these services related to cryptocurrencies.
Now an interesting question would be, how will PayPal buy the bitcoin, or maybe they already have filled their bags before the next bull run. We’ll probably never know, but still an interesting question.