The New York State Department of Financial Services approved a conditional bit-license to PayPal, which would allow the firm to introduce the services mentioned above. As a result, Bitcoin jumped to $12,296 today, showing a $400 increase.
In the official release of PayPal Holdings Inc., it said that it would significantly increase the utility of cryptocurrency. PayPal has collaborated with Paxos Trust Company to offer this service.
Some other fintech companies like mobile payments provider Square Inc SQ.N and stock trading application firm Robinhood Markets Inc are already in the market. Still, PayPal’s vast reach would help expand cryptocurrency to a lot more people.
California-based PayPal has 346 million active accounts worldwide and processed $222 billion in payments in the second quarter.
PayPal said that cryptocurrencies would be a viable option for purchases at its 26 million merchants worldwide, according to a report by Forex Live.
Initially, users would only be able to deal in four cryptocurrencies, namely, Bitcoin, Bitcoin Cash, Litecoin, and Ethereum.
Cryptocurrencies are volatile in nature; hence they are a good investment option for speculators, but not for shoppers and merchants.
PayPal will be using fiat currencies to settle payments, which means merchants will receive their payments in currencies like the US Dollar rather than digital coins.
The said service would be available to PayPal account holders in the US in the coming few weeks. However, the service would be fully implemented by early 2021, according to a report by Reuters.
The service will then extend to Venmo and a few other countries in the first half of 2021.
According to Dan Schulman, the President and Chief Executive of PayPal, the availability of cryptocurrencies as a payment option in the firm will encourage the global use of virtual coins.
Dan believes that the shift to digital currencies is inevitable and has clear advantages over traditional fiat currencies.
He said that with the level of technology and reach PayPal has, it is an opportunity and a responsibility for the firm to help advance digital currencies.
The said service would also help PayPal develop its network for any new digital currencies that the central banks may develop.
Dan also said that the firm is working with central banks to explore various roles in the new digital currencies.
The firm is also the founding member alongside Facebook Inc. for the cryptocurrency project called Libra in 2019. Unfortunately, the project was not much of a success for PayPal.
But with the service to deal with cryptocurrencies, the firm hopes to dominate in the cryptocurrency market.
Image courtesy of Tero Vesalainen/Shutterstock
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