The news that Paypal is to allow users to buy, sell and hold Bitcoin and other cryptocurrencies has been welcomed by financial experts, who see the development as a major step towards mainstream adoption for the industry.
Under the system, merchants will be unable to receive payment in cryptocurrencies, with any payments made by users converted into US dollars before being transferred to merchants’ accounts.
According to Reuters, which broke the story, support for Bitcoin and other cryptocurrencies will be added to Paypal for US account holders in the next few weeks, with an expansion to other countries beginning in the first half of 2021.
“A major step forward”
Nigel Green, chief executive of independent financial advisory firm deVere Group, welcomed the news, describing it as “a major step forward towards the mass adoption of digital currencies”.
“The blistering speed of the digitalisation of economies and every aspect of our lives, including financial lives, shows that there will be a growing demand for digital, global, borderless money – characteristics that are inherent to the likes of Bitcoin,” he said.
It follows support for Bitcoin from US-based Square. Previously, Paypal had been exploring providing support for Facebook’s planned cryptocurrency Libra, although decided against the move in 2019.
For many, then, the decision to provide support to Bitcoin and other major cryptocurrencies by Paypal has been long expected.
“The news hasn’t really come as a surprise to the industry. One of PayPal’s competitors in the US, Square, had seen revenue of $306 million in Q1 2020 surpassing its fiat revenue stream by around $100 million,” said Danny Scott, CEO and co-founder of CoinCorner.
“PayPal is currently only offering this service to the US and by the sounds of the functionality, it’s very basic, meaning that it’s a closed loop – aka, you can’t withdraw your Bitcoin and use it elsewhere, or send your Bitcoin from outside of PayPal into their system.
“The announcement is still great news, however, as it shows a positive step forward for the industry, and brings yet more credibility to Bitcoin and its future.”
Bitcoin gets Paypal support: Underscoring the future of money
For deVere’s Green, the news is also another sign that cryptocurrency naysayers are in the wrong.
“Unbelievably there are still some financial ‘experts’ and financial watchdogs who believe that cryptocurrencies are not the future of money,” he said.
“The decision by one of the biggest payment companies in the world to allow customers to buy, sell and hold Bitcoin is yet another example that exposes Bitcoin deniers and cryptocurrency cynics as being on the wrong side of history.”
The Bitcoin price climbed from $11,923 to $12,844 in response to the news.