Market Meditations | June 8, 2022
PayPal announced yesterday that they had begun rolling out a long-awaited feature for people that hold cryptocurrency in their accounts. What are they doing and why now?
- In the last quarter of 2020, PayPal opened up crypto trading and payments for eligible customers in the U.S., with a $20,000 per week trading limit.
- The coins supported to begin with were Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
- At the time, CEO Dan Schulman said there was an inevitable drift toward virtual currencies, highlighting the “efficiency, speed, and resilience of the payments system”.
- However, crypto could only be bought, sold and spent via the PayPal platform. Receiving and sending with non-PayPal accounts was not possible, potentially as part of a deal with regulators to get a Bitlicense.
- Yesterday, that all changed. SVP and GM Jose Fernandez da Ponte announced that select U.S. users could now transfer, send and receive all four cryptocurrencies with external wallets and exchanges.
- There would also be no fees or network charges to “send crypto to family and friends on PayPal in seconds”.
It is notable that despite double-digit share price losses in the recent market downturn, PayPal is forging ahead with their crypto plans. Jose Fernandez da Ponte told Decrypt that they “believe a substantial portion of commerce is going to move to digital currencies”. Since launching, they have increased the weekly limit to $100,000 and confirmed they are exploring the creation of their own stablecoin.