Can PayPal make Bitcoin a mainstream payment option?
A few weeks ago, reports emerged that PayPal is considering the start of offering services of buying and selling digital currencies. Given that the online payments giant has around 325 million customers, the excitement of the crypto community has been extremely high.
PayPal to start crypto transfers?
Right now, PayPal provides its users with an option to transfer funds from crypto exchanges like Coinbase. However, judging from the latest reports, Invezz.com reveals that PayPal is working to allow the buying and selling of Bitcoin (and other digital assets) directly from PayPal and its mobile payments platform Venmo.
It is still unknown how many cryptocurrencies would be available to Paypal users, but it is expected that the payment services provider will collaborate with several exchanges to source liquidity.
According to these reports, PayPal plans to offer direct sales of cryptocurrencies, a service which is expected to be launched in the next three months. The online payments giant refused to comment on the matter.
Digital currency exchanges Coinbase and Bitstamp are said to be potential contenders. Both exchanges declined talking about it.
It is known that PayPal and Coinbase have been collaborating for a long time now, since 2016. Back in 2018, Coinbase rolled out a service for US clients that allowed instant fiat withdrawals to PayPal. The service was made available in Europe last year, and then in Canada.
At the start of this year, PayPal posted job offers to boost its newly formed Blockchain Research Group. The job offers included 8 engineering positions in San Jose and Singapore.
One of the sources said that PayPal decided to implement cryptocurrencies into its own business after withdrawing from Facebook’s Libra project last year.
A matter of time?
Sri Shivananda, the Chief Technical Officer at Paypal, pointed out earlier that the company wants to create its own perspective on blockchain technology. The aim is to explore how decentralized technology can help PayPal contribute to enhancing the system of digital payments.
Shivananda added that it is “a matter of when not if,” the digitalization of currency will take place.
PayPal has been looking to adopt digital currencies since 2013. In that year, the current head of Libra project – David Marcus, who was the president of PayPal at the time, spoke highly of Bitcoin and digital currencies.
Shortly after that, John Donahoe, Chief Executive of eBay – the mother company of PayPal at the time – noted that PayPal will have to adopt Bitcoin someday in order to adapt to the fast-changing financial environment.
A year later, in 2014, PayPal formed a partnership with Coinbase, BitPay and GoCoin, however, the payments company only tapped outside companies to run BTC transactions, without actually integrating the cryptocurrency into its native wallet or providing direct sales.
Crypto as a mainstream payment option
Most of the experts in the crypto industry are not really surprised by the speculations over PayPal’s plans to fully integrate digital currencies. Chief Executive Officer of crypto lending network Celsius Network, Alex Mashinsky, is one of them.
Accordingly, Mashinsky doesn’t see why PayPal adopting crypto would be a problem. He believes that some of PayPal’s customers already own crypto assets. Hence, the job of the payments giant is to serve its customers better.
Mashinsky’s viewpoint is shared by Aaron Henshaw, the co-founder of blockchain infrastructure company Bison Trails. Henshaw doesn’t find the rumours surprising. Moreover, he says that he wouldn’t be surprised if PayPal was exploring options to completely incorporate Bitcoin buying in its platform.
This is due to their mission, according to Henshaw, and that is to allow everyone to participate in the global economy. In the end, the entire idea behind blockchain technology and cryptocurrencies is to allow for greater access to financial systems around the world.
Mashinsky adds that the expansion will cause a sharp rise in the prices of BTC and Ether due to their scarcity. By the time PayPal starts offering crypto services, buying and selling of Bitcoin can be made at a much higher price.
Therefore, it’s absolutely normal to see cryptocurrencies become a mainstream option if PayPal ultimately decides to offer crypto services. PayPal may facilitate a higher participation of crypto users in the traditional finance sector and welcome a new audience to the crypto industry.
The impact and contribution to crypto expansion would be huge if a company with 325 million registered users starts offering the buying and selling of Bitcoin and other crypto assets. According to the industry’s experts, it’s a matter of when, not if PayPal will start offering crypto services.
For this reason, we believe that offering direct sales of crypto assets to hundreds of millions of active users is most likely to push cryptocurrencies toward becoming a mainstream payment option.