on the crypto
This week, PayPal (PayPal shares to NASDAQ: PYPL) officially confirmed that it has entered the cryptocurrency market. The payment giant, with 346 million active accounts worldwide, has pledged to make the cryptocurrency "a source of funding for purchases from its 26 million merchants around the world."
Bitcoin and other cryptocurrencies experienced price growth following the announcement, which is one of several recent signs of mainstream corporate adoption of crypto technology.
PayPal customers, starting from the beginning of next year, will be able to instantly convert the balance of the chosen cryptocurrency into fiat currency, with a certain value not subject to commissions, as declared by PayPal itself. Users therefore will not have additional commissions, because the transactions will be regulated by the fiat currency corresponding to the rates of the eWallet company.
Go it slow
While this announcement proved to be bullish for the bitcoin market, a first analysis of the characteristics of PayPal's crypto services highlights that a mentality still prevails. go-it-slow. The company, in fact, has set obvious limits to users.
For starters, PayPal refuses to hand over customer keys. “You own the cryptocurrency you buy on PayPal but you will not be given a private key,” PayPal wrote, viewing the restriction as a tactic to prevent losses.
A customer who loses private keys also loses cryptocurrencies linked to that key virtually forever, the post points out. But keeping the keys away from customers ensures that PayPal can keep tighter control over how customers handle BTC, BCH, LTC, and ETH. Basically, users will not be allowed to send their cryptocurrencies.
Expansion of PayPal's crypto services to global markets in the first half of 2021
The service implementation also addresses a number of real-world restrictions. Only 49 out of 50 U.S. states have coverage at launch, with Hawaii being a notoriously difficult state for crypto companies excluded from the list.
“We plan to expand this service to select global markets in the first half of 2021,” said PayPal. There is also a weekly purchase limit of $ 10.000 and a limit of $ 50.000 over 12 months. All exchanges must be done in US dollars, PayPal said.
PayPal gets BitLicense
As part of the formalities, the New York State Department of Financial Services (DFS) said it had granted PayPal the first "conditional BitLicense" for a partnership with Paxos Trust Company, which allows customers to buy and sell cryptocurrencies. .
Now, with DFS approval, Paxos will partner with New York State to provide trading and custody services to PayPal to enable the fintech giant's 346 million customers to buy, sell and hold bitcoin, bitcoin cash, ether. and litecoin, according to a statement from the DFS.
