Bitcoin and other cryptocurrency coins, which have been around for more than a decade but have struggled to achieve mainstream adoption, just got a huge boost from PayPal.
PayPal said today that it will allow customers and the 26 million merchants on its network to buy, sell and shop using bitcoin and other virtual coins in its online wallet.
The service is already available for some U.S. users and goes into effect within weeks, but U.S. customers won’t be able to pay for products and services using cryptocurrency until early 2021. PayPal said it plans to expand the service to its peer-to-peer payment app Venmo and some other countries in the first half of 2021.
PayPal’s service does not allow bitcoin or other cryptocurrencies to be withdrawn or deposited. Once you buy the coins, they stay in your account until you sell, Coindesk reported. Initially, the service supports bitcoin (BTC), bitcoin cash (BCH), ether (ETH) and litecoin (LTC).
PayPal will be one of the largest U.S. companies to provide consumers access to cryptocurrencies, which could help bitcoin and rival cryptocurrencies gain wider adoption, Reuters reported.
Based in Silicon Valley, PayPal said it hopes the service will encourage global use of virtual coins and prepare its network for new digital currencies that central banks and companies may develop, President and CEO Dan Schulman said in an interview.
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he said.
Bitcoin prices spiked as much as 8 percent higher on the news Wednesday, and a bitcoin was priced as high as $12,817.17, Business Insider reported. The world’s top cryptocurrency is up more than 11 percent this week alone.
PayPal’s stock has more than doubled since the beginning of the coronavirus pandemic in the U.S. in mid-March. Other online payments companies such as Square and Venmo are booming too as coronavirus-wary consumers avoid the use of physical cash.
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Square paid $50 million to buy more than 4,700 bitcoins earlier this month. The company believes bitcoin could be more a “more ubiquitous currency in the future,” Square Chief Financial Officer Amrita Ahuja told reporters at the time.
Billionaire investor Mike Novogratz tweeted that PayPal’s move is “the biggest news of the year in crypto.” The former hedge-fund manager is CEO of Galaxy Investment Partners, a crypto-focused investment firm.
With 346 million users, PayPal is the 20th largest “bank” by deposits, Novogratz tweeted. “We have crossed the rubicon people. Exciting day,” he said.
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