PayPal’s entry into the cryptocurrency markets has been likened to a stimulus check for Bitcoin. The payments company, which has 346 million active accounts, could end up facilitating $50 billion in cryptocurrency transactions. This presents a big win for Bitcoin holders who would expect that such increases in trading would cause the price of the apex cryptocurrency to rise up.
PayPal’s strategic moves help it to not only offer cryptocurrency trading services through its platform but to also operate using a Bitlicense offered by the New York State Department of Financial Services (NYDFS). As a result, its customers can buy and sell cryptocurrencies such as Bitcoin, Litecoin, Ethereum, and Bitcoin Cash using the PayPal digital wallet. PayPal’s new service can also be used as a funding source for merchants.
According to PayPal,
“Consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with certainty of value and no incremental fees. PayPal merchants will have no additional integrations or fees, as all transactions will be settled with fiat currency at their current PayPal rates.”
A new survey by Cornerstone Advisors and FICO finds the following:
• 60% of smartphone owners have the PayPal application installed on their smartphones.
• 14% of PayPal users already have some form of cryptocurrency.
• $31.2 billion worth of retail products and services were purchased in the last year using cryptocurrencies by all Americans with PayPal users accounting for 74% of the amount.
The statistics indicate that PayPal users may be more likely to use Bitcoin and other cryptocurrencies as not only speculative investments but also for payments of goods and services, many of which are now carried out on mobile phones.
While many are optimistic about PayPal’s entry into crypto, some have reservations.
According to a blog post by Satoshi Labs:
“Until very recently, PayPal was anti-crypto. Writing in 2018, ex-CEO Bill Harris called Bitcoin ‘the greatest scam ever’, so what’s changed? When a household brand like PayPal starts selling Bitcoin, it’s probably not because they want to spur healthy adoption. If millions of newcomers are onboarded to Bitcoin by PayPal, there could be a very serious information gap that jeopardizes their experience and undermines key principles of cryptocurrency.“