LONDON (Reuters) – PayPal Holdings Inc. joined the cryptocurrency market on Wednesday, allowing customers to buy, sell and hold bitcoins and other virtual coins using the online wallet of the US digital payments company.
PayPal customers will also be able to use cryptocurrency to purchase 26 million merchants on their network, the company said in a statement.
PayPal hopes the service will encourage global use of virtual coins and build its network for new digital currencies that can be developed by central banks and corporations, President and Chief Executive Officer Dan Shulman said in an interview.
“We’re working with central banks and thinking about all types of digital currencies and how PayPal can play a role,” he said.
The company said that US account holders will be able to buy, sell and sell cryptocurrencies in their PayPal purse in the coming weeks. It plans to expand to Venmo and some countries in the first half of 2021.
Other mainstream fintech companies, such as mobile payment provider Square Inc. and stock trading app firm Robinhood Markets Inc., allow users to buy and sell cryptocurrencies, but PayPal’s launch has taken into account its vast reach.
The company, based in San Jose, California, has 346 million active accounts worldwide and paid $ 222 billion in the second quarter.
Cryptocurrencies are volatile, making them attractive to speculators, but attracting very little to merchants and shopkeepers. Transactions have been slower and more expensive than other mainstream payment systems.
The company said that cryptocurrency payments on PayPal would be settled using US currencies such as foreign currencies, meaning merchants would not receive payments.
Many central banks around the world have expressed their intention to develop digital versions of their currencies in the coming years, while Facebook Inc. led the creation of a cryptocurrency project called Tula in 2019. Paypal was a founding member but dropped out after a few months. .
PayPal, which has received the first conditional cryptocurrency license from the New York State Department of Financial Services, will initially allow the purchase of bitcoin and other cryptocurrencies, called Ethereum, bitcoin cash and LitCoin. It partners with Paxos Trust Company to offer the service.
Reporting by Anna Erera; Editing by Richard Chang