PayPal will now support Bitcoin trading

Users can buy, hold, and sell widely-used cryptocurrencies alongside other payment methods in their digital wallet

Three physical coins with the branded with the Bitcoin logo in front of the PayPal logo

PayPal has launched a service that will allow customers to trade and exchange cryptocurrencies directly from their account and through compatible merchants.

Bitcoin, Ethereum, Bitcoin Cash, and Litecoin can be bought and sold directly from PayPal's new digital wallet within the coming weeks, ahead of plans to make it available as a funding source for purchasing goods through the platform next year.

The platform will also provide account holders with training and guidance about cryptocurrencies to help them understand the ecosystem and the risks associated with investing in these blockchain-powered tokens.

This is arguably the most significant moment in continued efforts to bring cryptocurrencies into the mainstream, given PayPal's position as one of the most popular online financial services.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly," said PayPal CEO and president, Dan Schulman.

"Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.”

The service – which will be available to US users in the coming weeks and internationally by 2021 – is being powered by a partnership struck with the Paxos Trust Company, a regulated provider of cryptocurrency services. PayPal has also been granted a conditional ‘Bitlicense’ by the New York State Department of Financial Services, which is required for any services wishing to trade in bitcoin.

From early next year, customers will also be able to use their cryptocurrency holdings as a source to pay for goods from the company’s 26 million registered merchants across the globe. Consumers will also be able to convert their cryptocurrency balances into fiat currencies with the certainty of value and no incremental fees.

However, at this stage, there’s little indication as to how PayPal will be able to guarantee the certainty of value on any exchange, and concerns will inevitably remain as to whether cryptocurrencies will be stable enough to use over traditional currency in payment for goods. Bitcoin, for example, has fluctuated with extreme volatility in the last few years, and although it may have been relatively stable for the last few months, the value of the currency is still prone to swings.

Pay Pal has suggested that all transactions will be “settled with fiat currency at their current PayPal rates”. This means, in effect, that digital payments will become another funding source within the PayPal digital wallet, which also includes payment cards and various fiat currencies. The firm claims this will address previous concerns surrounding volatility, cost and the speed of cryptocurrency-based transactions.

There’s also a lack of clarity over whether PayPal’s extensive protection policies for buyers and sellers will apply to transactions made using cryptocurrencies. Given the fact these will effectively be another funding source sitting alongside other currencies and payment methods within the PayPal digital wallet, the normal levels of protection should apply.

Featured Resources

The ultimate law enforcement agency guide to going mobile

Best practices for implementing a mobile device program

Free download

The business value of Red Hat OpenShift

Platform cost savings, ROI, and the challenges and opportunities of Red Hat OpenShift

Free download

Managing security and risk across the IT supply chain: A practical approach

Best practices for IT supply chain security

Free download

Digital remote monitoring and dispatch services’ impact on edge computing and data centres

Seven trends redefining remote monitoring and field service dispatch service requirements

Free download

Most Popular

Best Linux distros 2021
operating systems

Best Linux distros 2021

11 Oct 2021
HPE wins networking contract with Birmingham 2022 Commonwealth Games
Network & Internet

HPE wins networking contract with Birmingham 2022 Commonwealth Games

15 Oct 2021
Veritas Backup Exec 21.3 review: Covers every angle
backup software

Veritas Backup Exec 21.3 review: Covers every angle

14 Oct 2021