Wednesday January, 6th 2021
PayPal will soon offer direct sales of cryptocurrency to its hundreds of millions of users, according to three insiders.
As of now, PayPal can be used to withdraw money from crypto-exchanges like Coinbase, but this new change will be the first time the company has offered direct sales of cryptocurrency.
“From what I understand, they will allow customers to buy and sell of cryptocurrency directly from PayPal and Venmo,” an industry source told CoinDesk. “They will also have wallet functionality so customers can store their crypto there.”
It is uncertain which cryptocurrencies will be available. The industry insider said they anticipated PayPal “would work with different exchanges to help with liquidity.”
Another source confirmed the plans, then went on to say the new service could happen in “the next quarter, maybe even sooner.”
PayPal did not comment on its plans.
Luxembourg-based Bitstamp and San Francisco-based exchange Coinbase were said to be among the possible partners. Both of these companies also declined to comment.
But an important fact is that PayPal has a relationship with Coinbase, starting in 2016. And in 2018, Coinbase made instant dollar withdrawals to PayPal possible for U.S. customers. Going even further, last year, European Coinbase users were allowed to withdraw to their PayPal accounts, quickly followed by Canadian users.
Meanwhile, other apps that offer cryptocurrency are raking it in. The payments company Square launched by Twitter’s CEO, began offering bitcoin purchases with its Cash App in 2018. A great move than has earning the company a whopping $306 million in bitcoin revenue according to its latest earnings report.
Revolut, a company based in London, began offering crypto to its users after arranging a 2017 partnership with Bitstamp, which raised $500 million, putting the platform value at $5.5 billion. And Robinhood, the wildly popular stock investing app, first offered crypto in February of 2018.
Cryptocurrency is increasingly viewed as a no-brainer way to bolster customer numbers on financial apps and create new revenue. Dan Schulman, PayPals CEO, has made certain his goal this year is to rapidly monetize Venmo, which has a user base of over 52 million accounts.
Job postings reveal the truth
At the beginning of 2020, PayPal posted jobs to step up its new division, called the “Blockchain Research Group”. They published eight engineering openings: four in Singapore and four in San Jose.
After PayPal’s short relationship with Facebook’s Libra project last year, their goal is now expanding its own payments expertise, one of the inside sources added.
During an interview with CoinDesk, PayPal CTO Sri Shivananda said they want their own “experience and perspective on the technology itself to understand how the technology can help our company contribute to open digital payments which serve everyone.”
Shivananda was not able to go into detail about any of the company’s specific plans.
“We are a big proponent in the possibilities of blockchain. Currency digitization is only a matter of when not if,” Shivananda said.