PayPal Holdings Inc. has announced that merchants can now buy, hold, and sell cryptocurrency directly from their business accounts. This move expands on PayPal’s existing cryptocurrency services for consumers and signals a deeper commitment to digital currency and blockchain technology.
Since 2020, PayPal has allowed consumers to buy, hold, and sell digital crypto through their PayPal and Venmo accounts. Last year, the company took a significant step by launching its own U.S. dollar-denominated stablecoin, known as PayPal USD (PYUSD). This stablecoin is fully backed by U.S. dollar deposits, U.S. Treasuries, and similar cash equivalents.
According to Jose Fernandez da Ponte, PayPal’s Senior Vice President of Blockchain, Cryptocurrency, and Digital Currencies, business owners have shown increasing interest in cryptocurrency. “Business owners have increasingly expressed a desire for the same cryptocurrency capabilities available to consumers,” he stated.
With the new update, merchants can:
- Buy, hold, and sell cryptocurrency directly from their PayPal business accounts.
- Transfer digital currency to third-party eligible wallets.
- Send and receive supported tokens to and from external blockchain addresses.
These features allow businesses to manage their crypto assets more effectively and offer new payment options to their customers.
It’s important to note that PayPal’s merchant functionality will not be available in New York at launch. This is due to regulatory requirements by the New York State Department of Financial Services, which oversees Virtual Currency Business Activity in the state.
PayPal USD is issued by Paxos Trust Company, a fully chartered limited-purpose trust company. Paxos is licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services. The stablecoin can be bought or sold through PayPal and Venmo at a rate of $1.00 per PayPal USD.
The reserves for PayPal USD are fully backed by:
- U.S. dollar deposits
- U.S. Treasuries
- Similar cash equivalents
This ensures that the stablecoin maintains its value and provides confidence to users engaging in cryptocurrency transactions.
Merchants have had various options for accepting crypto payments before PayPal’s expansion. Services like BitPay and Coinbase Commerce have been popular choices for businesses looking to integrate cryptocurrency payments.
The ability to manage cryptocurrency directly from a PayPal business account simplifies the process for merchants. They no longer need to rely on third-party services to accept or manage crypto payments. This integration could lead to wider cryptocurrency adoption among businesses and consumers alike.
To start using these new features, businesses can:
- Log into their PayPal business account.
- Navigate to the cryptocurrency section.
- Begin buying, holding, or selling supported cryptocurrencies.
While PayPal hasn’t specified all the supported tokens in this announcement, it’s expected that they will include major cryptocurrencies like Bitcoin, Ethereum, and possibly others.
- Diversified Payment Options: Accepting crypto can attract a broader customer base.
- Lower Transaction Fees: Cryptocurrency transactions can have lower fees compared to traditional payment methods.
- Fast Settlements: Crypto transactions can settle faster, improving cash flow.
PayPal emphasizes security by allowing transfers to and from third-party eligible wallets and external blockchain addresses. This gives businesses control over their digital assets while maintaining security protocols.
PayPal’s expansion into business cryptocurrency services indicates a growing trend of mainstream financial institutions embracing digital currencies. As regulations become clearer and technology advances, more businesses may find it advantageous to integrate cryptocurrency into their operations.
PayPal’s move to offer cryptocurrency services to U.S. business accounts is a significant step in the evolution of digital payments. By providing merchants with the tools to buy, hold, and sell cryptocurrency, PayPal is meeting the growing demand for crypto capabilities in the business sector. This expansion not only benefits businesses but also contributes to the overall growth and acceptance of cryptocurrency in the mainstream economy.
