The uptake of digital payment solutions and digital data warehousing continues to rise significantly and especially as the COVID-19 pandemic rages on. Coupled with this growth is an interest to buy, use and sell digital currencies. Given that cryptocurrency has been around for a while and people have warmed up to it as a legitimate means to facilitating business and growing wealth, central banks and individuals alike are all in. To meet the demands of their customers, PayPal Holdings, Inc. have introduced a new capability on their platform. While it is currently limited to US users, this new facility will enable customers to hold, sell or buy cryptocurrency right through their accounts on PayPal. With a client base of over 26 million merchants globally, this is a big step for inclusivity when it comes to online trade.
Following this announcement, President and CEO of PayPal, Dan Schulman termed his company’s move as inevitable. For sure, a lot of people in the world are benefitting from digital payment platforms – there is greater access, higher efficiency and faster transfer speeds. Tasked with the responsibility to improve user experience for their customers, PayPal once again upgrades their system to accommodate a changing business scene. This new dawn for PayPal is an expression by this virtual money remittance system to stay committed to positively impacting global commerce and finance.
Adoption and rollout of Cryptocurrency
While cryptocurrencies have been in use for more than a decade, adoption has typically been attributed to volatility and transaction processing speed. There is a healthy level of competition in this market as more variations enter the market. A study done by Bank for International Settlements indicates that 10% of central banks around the world will be rolling out individualized digital currencies for their customers within a period of 3 years.
For many internet users, the word cryptocurrency is still foreign. Those who have heard it before probably know only about Bitcoins. Well, the best way to define this new legal tender is to consider the various currencies of the different countries of the world. In the same way, there are many currencies in the crypto space; Bitcoins, Litecoin, Ethereum and Bitcoin Cash are the pioneer currencies on PayPal.
As had happened with PayPal for most of its most popular features, usability is scaled in phases. The rest of its users outside the United States may have to wait till the end of first half of 2021 to enjoy cryptocurrency trade through their PayPal accounts.
Being the first in its line of business to adopt cryptocurrency trade within its platform, the regulation to engage the public has been issued conditionally from the New York State Department of Financial Services (NYDFS). The license will provide a working framework through which PayPal will serve as a model for other institutions to follow. The NYDFS is hopeful that the Bitlicense it has offered to PayPal will encourage, assist and promote the entry of other players into the market.
How PayPal will promote cryptocurrency adoption
In addition to opening up its platform to trade in digital currencies, PayPal also plans to encourage uptake through education. Any investment venture has its fair share of opportunities as well as risks and it is in the interest of the platform users to know all that it entails. Educational materials will ideally be circulated via emails and press releases to equip those who are looking forward to this facility.
From October 2020 when PayPal opened up their platform to cryptocurrency, to the last day of 2020, no fees will be charged on sales and purchases of cryptocurrencies through PayPal. At the same time, crypto funds held in individual accounts during this time period will not be billed.
At the dawn of 2021, PayPal users who will have cryptocurrency in their accounts will be able to use these funds to pay for their purchases. For those impromptu purchases, users will be allowed to instantly convert cryptocurrency to virtual currency without affecting their value. This means that merchants who have in the past used PayPal to pay for goods or services will now be able to invest within the same platform.
If you have a PayPal account and live in the United States, this news is for you. It is even better and more beneficial if you are an active user of the platform. This news has been a long way coming given that cryptocurrency showed up more than 10 years ago. Having a PayPal endorsement just goes to show that those who have been using digital currency have been doing the right thing. While unimaginable profit margins have been gained since its inception, the time for PayPal users is now.