Paying in cryptocurrency from a PayPal account will become reality. The American payments giant announced on Tuesday that its customers who hold bitcoin, ether, bitcoin cash and litecoin in their PayPal digital wallets will soon be able to convert their holdings into fiat currencies to make purchases among the 29 million. partner traders. The company clarified that it will not charge any transaction fees for this service but only one type of crypto per purchase can be used. “This is the first time that you can transparently use cryptocurrencies in the same way. than a credit card or debit card in your PayPal wallet, ”CEO Dan Schulman told Reuters ahead of an official announcement. Through this service, “Checkout with Crypto”, merchants in the network will be paid in their local currency after PayPal has converted the amount into US dollars according to the standard conversion rate defined by the company.
After allowing its customers to keep and hold cryptocurrencies, PayPal is therefore launching the second step in the rationalization of cryptocurrencies as a common payment method. But PayPal isn’t the first payment app to offer cryptocurrency support. In 2018, its competitor Square launched support for Bitcoin on the Cash app. But with 377 million users, PayPal is a major player in the industry and paves the way for large-scale use of cryptocurrencies.
Bitcoin as a means of payment
And again, the PayPal effect was immediate in the cryptocurrency market, especially bitcoin which gained over $ 1,000 shortly after the announcement.
PayPal’s ambitions in cryptocurrencies had already helped launch the bullish momentum of bitcoin last fall, when the digital currency was still moving around $ 10,000, against more than 58,000 today. Driven by increased interest from large financial firms betting on greater adoption and seeing it as a hedge against inflation, bitcoin has already doubled in value since the start of 2021.
PayPal’s launch comes less than a week after Tesla announced it would start accepting bitcoin payments for its cars. Unlike PayPal transactions where merchants will receive fiat currency, Tesla has said it will keep bitcoin used as a form of payment. While the nascent asset is gaining traction among traditional investors, it has yet to become a popular form of payment, in part due to its continued volatility.
By offering to convert bitcoin into fiat currency, PayPal hopes to reduce the risk of volatility weighing on traders. “We believe this is a transition period for cryptocurrencies moving from the status of an asset class that you buy, hold and / or sell to a legitimate funding source to conduct real-world transactions with millions of people. traders, ”said Dan Schulman.