PayPal is hopping on board the cryptocurrency train.
Passengers: Square, Robinhood, Fidelity, Facebook (among others). Destination: the future.
PayPal on Wednesday announced new features that will let customers buy, sell, hold, and pay with cryptocurrency within their accounts. Initially, it will support digital currencies Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
The payments giant is one of the largest financial services providers to venture into the world of crypto, following its competitor Square, whose founder Jack Dorsey is a longtime proponent of Bitcoin and its peers. Starting early next year, PayPal’s 346 million customers will be able to shop the network’s 26 million merchants with digital currency, which the service will convert to fiat currency for merchants to receive.
While cryptocurrency’s volatility on the market has posed a risk for shoppers and merchants in the past, PayPal believes its conversion services will lessen that risk, as PayPal itself will be handling price fluctuations while merchants get their traditional monies. According to the company, this move will “significantly increase cryptocurrency’s utility.”
A global shift
The move comes as central banks across the globe are also exploring cryptocurrency, with seven major banks, including the Federal Reserve and the European Central Bank, recently creating a framework for issuing world digital currencies, and the People’s Bank of China testing its own digital currency. And a survey by the Bank for International Settlements found that 1 in 10 central banks, representing about one-fifth of the world’s population, expects to issue its own digital currencies within the next three years.
“The shift to digital forms of currencies is inevitable,” PayPal CEO Dan Schulman said in a statement. “We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
According to PayPal, customers will be able to buy, sell, and hold cryptocurrency in their digital wallets starting within the next few weeks.
PayPal also said it plans to bring its cryptocurrency services to its peer-to-peer payments subsidiary, Venmo, by mid-2021.
The company’s stock is up nearly 5% following the news.