After rumors had been circulating in recent months about an upcoming big business move by PayPal, the payment platform's parent company, PayPal Holdings, Inc., confirmed on Oct. 21, that it would soon provide customers the opportunity to buy, sell, and hold cryptocurrencies via their PayPal accounts, Reuters reports. In addition, users in the U.S. will be able to make purchases with digital currencies at the 26 million merchants currently in the brand's global network.
"The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly," Dan Schulman, president and CEO of PayPal, said in a statement. "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. We are eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce."
U.S. customers can expect access to the buying and selling feature over the course of the next few weeks, but you'll have to wait until the beginning of 2021 to use cryptocurrencies for shopping, the company said. Read on to learn what PayPal's move into the crypto market means for you and what you should know if you plan on dipping your toe into the volatile virtual-currency game. And for more financial tips, check out This One Credit Card Will Get You the Most Cash Back Right Now.
1 You won't be able to ignore cryptocurrencies for much longer.
While cryptocurrencies haven't been around all that long, they are far from the niche market you may have considered them to be. In fact, cryptos are going mainstream, and it's happening fast. According to a survey by the Bank for International Settlements, one in 10 central banks—representing approximately one-fifth of the world's population—expect to issue their own digital currencies within the next three years, as PayPal noted. And for more curious currency content, check out The Biggest Myth About Money You Need to Stop Believing.
2 Initially, you will have access to four digital currencies from your PayPal account.
In the next few weeks, PayPal said they will be "introducing the ability to buy, hold, and sell select cryptocurrencies, initially featuring Bitcoin, Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal digital wallet." And while we're on the subject of your finances, This Is the State Where Your Money Is Worth the Least.
3 You will be able to convert cryptocurrencies to the U.S. dollar instantly.
Beginning in January 2021, shorty after the marketplace is made available for customers to buy and sell cryptos via their PayPal account, users will be able to use them at any of the 26 million merchants on the company's platform by instantly converting cryptocurrencies to a government-issued currency, such as the U.S. dollar. And they can do so with "certainty of value and no incremental fees," PayPal says.
"In effect, cryptocurrency simply becomes another funding source inside the PayPal digital wallet, adding enhanced utility to cryptocurrency holders, while addressing previous concerns surrounding volatility, cost, and speed of cryptocurrency-based transactions," the company's statement read.
4 Similar crypto services will soon be available on Venmo.
PayPal Holdings, Inc. also owns another popular digital wallet and payment platform you may be familiar with: Venmo. And users of that app can expect the same features to be available within the first half of 2021. And for more up-to-date information delivered to your inbox, sign up for our daily newsletter.
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