Prices in bitcoin surge after the online payments giant announces its plans to release a crypto service
PayPal is working on launching its own cryptocurrency service, which will allow people to buy, hold, and sell digital currency on the site and on its applications.
The online payments giant stated that adding the cryptocurrency functionality was a significant step forward in encouraging the mainstream adoption of cryptocurrencies such as Bitcoin. Investors in the cryptocurrency space appeared to agree with the company, as prices rose by five percent on the news last Wednesday, October 21.
The President and Chief Executive Officer of PayPal, Dan Schulman, has described the slow shift from physical to digital currencies as “inevitable.”
“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.” Schulman explained.
PayPal has stated that the new digital currency service will allow customers to hold and exchange Bitcoin, Bitcoin Cash, Ethereum, and Litecoin cryptocurrencies through the company’s digital wallet. The digital wallet, in turn, will allow people to shop online and facilitate fund transfers.
It remains to be seen whether the payments company will expand their offerings to include other cryptocurrencies in the future.
US customers of PayPal will be receiving access to the crypto service in the next few weeks. However, they will not be able to pay for any products and services using their cryptocurrency until early in 2021.
Investors appeared to respond positively to this news on Wednesday, as the stock price of PayPal rose after the opening bell before it retreated close to where it opened for the day. Since the beginning of the COVID-19 pandemic in the US in March, the company’s stock has more than doubled.
Generally, the pandemic has fueled a boom in the online payments industry. Companies such as PayPal, Venmo and Square have been thriving due to the increased need for consumers to avoid the use of physical cash.
Aside from Paypal, Square is also betting big on the integration of cryptocurrencies. The online payments giant spent $50 million to buy more than 4,700 bitcoins earlier this month, and Amrita Ahuja, the company’s Chief Financial Officer, told reporters at the time that the company sees Bitcoin’s potential to be a “more ubiquitous currency in the future.”