Cryptocurrency has gradually been moving into mainstream society, with PayPal becoming the latest company to announce integration with the divisive currency.
Oct. 28, 2020
PayPal (NASDAQ: PYPL) is one of the biggest payment companies out there today and recently announced that it is going to allow for the purchasing, selling, and holding of cryptocurrencies through its platform. What does this mean for the payment processor?
PayPal has entered the cryptocurrency game
In the near future, U.S. PayPal users will be able to trade bitcoin, litecoin, bitcoin cash, and ether. This will be available through PayPal’s Venmo mobile payments platform, as well as in paying for goods across the 26 million merchants that are part of the company’s network. This feature will be rolled out to other regions during the first half of 2021.
In an announcement, PayPal highlighted the clear advantages associated with the use of digital currencies. This includes financial inclusion and access, as well as resilience, speed, and efficiency.
Its stock rose on the news, but what does it mean?
The news was well received by the crypto community, with the price of bitcoin rising by about 15% shortly after the announcement. There were also rises of 10%-15% for the other featured cryptos. It is a big move for the crypto sector as it gives these cryptocurrencies easy access to more than 345 million PayPal users. In Q2 2020, PayPal processed 3.7 billion transactions.
PayPal saw its share price reach all-time highs following the announcement, having already doubled since the start of the COVID-19 pandemic. The significant increase in online transactions is the main reason for this growth.
Some of its rivals have started making moves in the crypto space, with PayPal looking to outpace these competitors. For example, Square recently spent $50 million in buying over 4,700 bitcoins, with the payment processor believing that bitcoin can be a “more ubiquitous currency in the future.”
Is this a good or bad move?
This certainly looks to be a smart move by PayPal, with little downside to the adoption of cryptocurrencies into its platforms. With these forms of currency becoming ever more popular, PayPal will provide an easy way for the public to start using cryptocurrencies for everyday transactions.
PayPal clearly wants to be an early-mover among mainstream payment companies to embrace crypto in a big way. PayPal CEO and President Dan Schulman is clearly bullish on crypto, saying that the transition from physical currencies over to digital currencies is “inevitable”.
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