There’s a major new way for everyday people to switch from regular cash to cryptocurrency, and it’s through an app that many have probably been using for years: PayPal.
Why is this important: In a highly anticipated announcement, PayPal, which claims more than 400 million users, is giving them the option to take Total control of crypto they buy on the app. Now that withdrawals are enabled, the business becomes part of the infrastructure of the crypto economy.
- They can also use PayPal to sell the crypto they were sitting on.
The big picture: PayPal is a very familiar application that many people are very comfortable with, which will now allow them to move crypto from its servers to a wallet that only the user controls.
- The great promise of cryptocurrency is to give people – when and if they want – complete control of their money in a digital form.
Rollback: PayPal entered the crypto world in October 2020, when they announced it would support buy and sell bitcoin, ether, bitcoin cash and litecoin.
- Yes, but: Without allowing withdrawals, it was little more than a cryptocurrency video game, a game where people could bet on when one of those cryptocurrencies might go up in value.
What they say : “We will continue to roll out additional crypto features, products and services in the coming months,” PayPal’s Jose Fernandez da Ponte said in the announcement of the new features, shared in advance with Axios.
In the weeds: PayPal has a few other features that might be useful for the crypto-enthusiastic user.
- Sending any of its four cryptocurrencies to any PayPal user is free. So while a transaction always costs a fee on a blockchain, if the person a user is transacting with has PayPal, they can do so instantly and at no cost.
- PayPal has always been open to redeeming crypto purchased by its users. By allowing deposits, PayPal opens up to become another place for retail holders to exit crypto positions as needed.
To note : Cash App, from the company that makes the Square point-of-sale system, pioneered crypto in payment apps in 2018, but only for bitcoins.
What we are looking at: When will Venmo enable the same feature? Venmo, the payment application popular with millennials and generation Z, belongs to PayPal. It did not allow buying cryptocurrencies until six months after PayPal did though.
The bottom line: “We believe we are playing an important role in bringing increased access and utility to the digital currency space and that digital currencies will play a crucial role in the future of commerce,” da Ponte told Axios.
(Crystal Kim contributed reporting)