PayPal confirms development of cryptocurrencies
PayPal has recently announced that it is working on introducing cryptocurrencies into its service as well as looking at the addition of Bitcoin buying and selling features.
The news came in a public letter Paypal sent to the EU in response to their consultation on a proposed framework of crypto-assets, and the firm also discussed some of their reasoning behind the decision to invest in cryptocurrencies:
“The crypto-asset industry has experienced substantial growth over the past few years and has become a subject of considerable discussion and debate, with topics ranging from the benefits of decentralization to the potential impact of global stablecoins and central bank digital currencies. As such, PayPal is continuously monitoring and evaluating global developments in the crypto and blockchain/distributed ledger space. Of particular interest for us is how these technologies and crypto-assets can be utilized to achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services and the growing sector of online casino payments.”
Many crypto exchanges, such as Coinbase, were already allowing users to buy cryptocurrencies using PayPal but this marks the first time that it can be done natively through PayPal’s own services.
At this stage, it is still unclear which crypto services will be offered by PayPal. However, Coinbase is one of the most likely candidates to be offered as a service – the San Francisco based company has had a long standing-agreement with PayPal for many years, and has always been at the forefront of the latest major shits in the payment industry.
They further suggested within the public letter that the EU should introduce clear definitions for crypto-assets and properly regulate companies in the industry. They also asked the regulator to bring crypto activity under the AML/CFT requirements.
PayPal was previously a member of the Libra association, a body set up to govern facebook’s proposed stablecoin. Following a storm of controversy and skepticism, they announced that they were withdrawing from the association in October 2019.
PayPal partners with Paxos
PayPal operates in 31 European states and has around 95 million merchants and consumers. The latest offering would make them the most prominent mainstream company to offer Bitcoin trading.
A new development in this story is that PayPal has reportedly chosen Paxos to handle the supply of crypto services, according to multiple services. Last week, the New York-based firm announced that they were partnering with Revolut US, the American wing of the British Fintech firm, and a direct competitor to Trustly's technologies. So this is another great development for Paxos. A formal announcement of the partnership between the two firms is expected as early as this week.
Paxos’s CEO Charles Cascarilla believes that its brokerage service marks a ‘tipping point’ for cryptocurrencies, suggesting that more major clients were on their way to the service.
This major new partnership with PayPal could instill more confidence in bigger firms to start promoting cryptocurrencies and introducing them into the mainstream. It is likely that other Fintech firms, such as Trustly, will follow PayPal and Revolut.