The latest reports reveal that PayPal has been granted a unique conditional Bitlicense by the New York State Department of Financial Services. The payments network will start enabling its more than 346 million users to buy, hold, and sell cryptos directly from their PayPal account from early 2021.
All PayPal users will have the ability to use bitcoin cash, ethereum, bitcoin, and litecoin to shop at the company’s 26 million globally. Users can immediately change their chosen cryptocurrency balance to fiat currency. They will have a chance to do that with the certainty of value and no incremental fees.
Moreover, there will be no extra costs imposed on the merchants either since all transactions will be settled using fiat at the prevailing PayPal rates. The company now plans to expand these features to Venmo and choose various international markets to serve in the first six months of 2021.
Sources familiar with the matter say that PayPal now expects the service to support mainstream adoption of crypto-cash as it prepares the network for the arrival of various central bank-issued digital currencies. The president and CEO, PayPal, Dan Schulman, said:
“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption, and interoperability of these new instruments of exchange. 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 currency will play in the future of global finance and commerce.”
Partnerships And Developments
PayPal teamed up with Paxos to offer crypto trading and custodial services. Paxos is a New York State-chartered trust company. Charles Cascarilla, CEO, Paxos said that they are pleased to partner with PayPal to support their introduction into the cryptocurrency market. He added:
“We were the first company to receive a New York Trust Charter for virtual currency business activity so we should be also the first to support the Department’s new conditional licensing framework. PayPal’s selection of Paxos is a reflection of New York’s status as the gold standard for cryptocurrency regulation.”
Interestingly, PayPal has its sights set on a blockchain-based framework for different future iterations. Last year, the company’s venture capital arm, PayPal Ventures, invested in TRM Labs and Cambridge Blockchain. By description, TRM Labs is a company that is focused on helping financial institutions prevent crypto fraud and financial crime while Cambridge Blockchain is blockchain-based identity management and compliance software firm.
In an official statement, the company said:
“PayPal will continue exploring the potential of distributed ledger technologies to improve financial services and assure they are faster, more secure, and less expensive. The company intends to work hand-in-hand with regulators, governments, and central banks in this quest.”
PayPal pulled out of the Libra Association but this development shows that it did not pull away from the crypto and blockchain world.