PayPal entered the cryptocurrency market on Wednesday, introducing a new service that allows users to buy, sell and hold Bitcoin directly in their existing PayPal account.
Ethereum, Bitcoin Cash, and Litecoin will also be offered in the first wave of supported digital currencies.
The California-based payment giant also confirmed plans to incorporate cryptocurrency into transactions from early 2021, so users at more than 26 million merchants worldwide can pay for goods and services directly with digital currency.
The feature is initially limited to account holders in the US, although the company expects to expand the service to more of the 346 million active accounts worldwide by next year.
PayPal, which also owns the Venmo joint payments app, is one of the world’s largest online payment brands. News that it supports the cryptocurrency caused the value of Bitcoin to soar more than $ 1000 and surpass $ 12,960 in 24 hours.
PayPal’s cryptosystem will initially be a closed loop, with the idea of bringing the adoption of cryptocurrencies to a wider audience, i.e. those who have heard of the concept but have not yet entered the ecosystem due to confusion or risk aversion.
However, the payment company hopes to use its size and brand awareness to evangelize the move to digital currency. This is a fundamental change that President and CEO Dan Schulman believes is “inevitable” due to efficiency gains and cost savings.
“We are committed to working with central banks and regulators around the world to offer our assistance and make a meaningful contribution to shaping the role digital currencies will play in the future of global finance and commerce,” he added.
Charles Cascarilla, co-founder and CEO of Paxos, who built the platform for PayPal’s new crypto service, says the news matters to the entire industry: “PayPal can drive awareness, education, adoption and use of digital currencies increase.”
Danny Scott, CEO and co-founder of Crypto Exchange CoinCorner, says the announcement “didn’t really surprise the industry”.
Ever since PayPal pulled out of Facebook’s on-ice stablecoin scale, it has been looking for an alternative to cryptocurrency. This first foray, says Scott, “marks a positive step forward for the industry and brings even more credibility to Bitcoin and its future.”