PayPal Finally Embraces Cryptocurrencies After Obtaining A New York License

PayPal, one of the biggest financial services providers announced that its U.S-based customers would be able to hold, buy, sell, and use various cryptocurrencies, exposing them to a 26-million merchant base. The move is also anticipated to encourage mass domestic adoption and skyrocket cryptocurrencies into mainstream usage.

At least for now, PayPal, and later in 2021 its Venmo subsidiary, would operate with Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. The well-established crypto operator, Paxos, will work side by side with PayPal to provide support on all crypto-related payments and transactions due to the provisional license that PayPal received from The New York State Department of Financial Services. Paxos will support PayPal`s operations until PayPal obtains a full license.

Starting the roll-out in a couple of weeks, PayPal would initially allow buying, selling, and holding cryptocurrencies, with plans for merchant usage from early 2021. The company also disclosed that the list of supported cryptocurrencies would expand, as well as additional countries will be eligible to receive crypto support.

The new services effectively put PayPal as one of the largest U.S.-based companies providing crypto payments. Also, the added crypto support would help the company prepare for new digital currencies like CBDCs.

“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” President and Chief Executive Dan Schulman said in an interview.

However, fintech companies like Square Inc. and Robinhood already allowed users to buy and sell cryptocurrencies, but PayPal’s massive customer base may shift the way cryptocurrencies are acquired and used, as the company has 346 million active accounts. Also, PayPal managed to process over $222 billion in payments just throughout the time boundaries of Q2 of 2020.

Meanwhile, PayPal’s shares skyrocketed to an all-time high shortly after the announcement. As of press time, PayPal has a $250 billion market capitalization with a 100% yearly market cap growth. Also, PayPal recorded a 20% share price increase, while Nasdaq Composite only made a 20% market cap increase and a 7.3% price boost. Bitcoin price also went up and surpassed the $13,000 level for first time since July, and only for third-time since the all time high from late 2017.