According to Jose Fernandez da Ponte, the Senior Vice President and General Manager of Blockchain, Cryptocurrencies, and Digital Currencies at PayPal, “This feature was the most demanded from our users since we began offering the purchase of crypto on our platform.”
Customers of PayPal will be able to move supported coins into PayPal, move cryptocurrency from the PayPal app to external crypto addresses such as exchanges and hardware wallets, and send cryptocurrency to other PayPal users “in seconds” thanks to the addition of the new functionality.
When customers make external transfers, they are responsible for paying network fees, which are determined by the blockchain and vary depending on the type of cryptocurrency being transferred. There are no transaction fees assessed for using PayPal to send money to another PayPal user.
According to Fernandez da Ponte, “If users have crypto somewhere else and want to consolidate, they can bring it to PayPal from external addresses.” They are also able to send cryptocurrency to anybody that is a part of the PayPal system.
In October of 2020, PayPal provided its customers with the ability to buy, sell, and hold cryptocurrency. Then, toward the end of March 2021, PayPal made an announcement regarding the launch of a new feature called Checkout with Crypto. This was a function that enabled customers to pay with cryptocurrency when checking out at millions of online businesses. This feature was an expansion on PayPal’s existing investments in the cryptocurrency market, which include the company’s partnership with Paxos to power its service that enables customers to buy, sell, and hold a variety of cryptocurrencies as well as the company’s acquisition of cryptocurrency security startup Curv. At last year’s Consensus conference, Fernandez da Ponte confirmed that the company would soon begin providing its users with the ability to transfer.
This week, Fernandez da Ponte gave an interview to TechCrunch in which he stated that the conversion is a natural one for our users who want to do more with their digital assets. “We see ourselves as a conduit between the world of fiat currency, also known as traditional finance, and the world of web3 technology.” We are making it possible to connect to other wallets, exchanges, and applications.
Giving its customers the ability to move their cryptocurrency assets (such as bitcoin, ethereum, bitcoin cash, or litecoin) into, outside of, and within PayPal is a move that the company could not avoid making if it wanted to keep up with the continued adoption of cryptocurrencies and not run the risk of being viewed as behind the times in a rapidly changing fintech landscape.
In addition, Fernandez da Ponte stated that PayPal is moving in this direction “as people are [still] adopting cryptocurrencies,” despite the recent volatility that has been seen in the cryptocurrency space.
According to Fernandez da Ponte, this action demonstrates that “we’re in this for the long term.” I believe that it is essential to maintain one’s current course and to keep making investments in the area.
Users in the United States are the only ones who can take advantage of the newly added functionality, and PayPal says that in order to ensure user safety, an additional identity verification process must be completed before users can send or receive any cryptocurrency. The rollout will be done in stages, with some users in the United States being able to do so as of today, and other “eligible” customers in the United States being able to do so in the coming weeks. “Eligible” customers are those who have finished the process of identity verification.
After receiving approval from the New York Department of Financial Services, PayPal was able to move from having a “conditional” BitLicense to having a “full” one, which allowed the company to offer the new functionality.
According to a statement released by the New York Department of Financial Services Superintendent Adrienne Harris, “DFS is committed to keeping New York at the center of responsible technological innovation and forward looking regulation.”