Can you purchase cryptocurrencies with Paypal?
Cryptocurrency, the digital currency created with cryptography technology, continues to increase in popularity. But can you buy it with Paypal?
Cryptocurrency, the digital currency created with cryptography technology, continues to increase in popularity. More users continue to adopt the use of cryptocurrencies into their payment practices as a secure method to send money without geographical limitation. This might sound familiar. After all, the American platform Paypal operates with a similar mission. For those unfamiliar, PayPal has continued to operate forward-thinking digital payment options for nearly 20 years. Now, over 300 million consumers and merchants transact using the platform. With many similarities in place, it only makes sense that Paypal Holdings Inc. (NASDAQ: PYPL) would eventually leverage the increased interest in cryptocurrency since new cryptocurrency users require a trusted platform.
Luckily, PayPal has since made the announcement that all U.S. users can buy, sell and hold specific cryptocurrencies. This announcement is promising for future adoption since many users struggle to find a Bitcoin Exchange that they trust. Therefore, purchasing on Paypal might be a small step to ease new cryptocurrency users into the crypto space.
How to buy and sell cryptocurrency with Paypal
To start purchasing, Paypal requires users to have a Cash or Cash Plus account. Further details can be consulted using the terms and conditions. While PayPal is designed as a secure method to send, receive and access funds, the app itself cannot protect users against the volatility of the cryptocurrency they choose to purchase. Therefore, the same level of attention and research should be considered before making any purchases. The Paypal app has released many articles designed for beginners to help users learn at their own pace. Resources provided include information about the cryptocurrency ecosystem’s inner workings, the risks of investing and information on future technology initiatives.
After determining the type of cryptocurrency that a user wants to purchase and in what amount, the tactical steps are easy. Users can select “crypto” from the Paypal dashboard. From there, users can choose from available cryptocurrency options, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTH) and Bitcoin Cash (BCH). To make a purchase, the user simply needs to click the “buy” button, which will prompt them to verify their identity. Paypal will display the spread to show users the conversion rate and associated fees they will pay. If numbers look favorable, users can proceed with the transaction, adding coins directly to their PayPal digital wallet.
Within the application, users can continue to track the prices of their currency through different charts. Alternatively, users have the opportunity to make purchases from any sellers that accept PayPal. To do so, the cryptocurrency used to make a purchase will be instantly converted into fiat currency, which will be paid forward to the merchant.
The future of cryptocurrency on Paypal
This announcement is only the beginning of Paypal’s plans for cryptocurrencies. The company also announced that adding this offering to Venmo is also on the roadmap for 2021. However, many continue to question the market for this service as the potential still exists for consumers to lose money if they don’t know what they’re doing. Paypal rebuttal was that this initiative would increase the education around cryptocurrency offerings.
To put users at ease, the New York State Department of Financial Services (NYDFS) issued Paypal a “Bitlicense,” one of the first of its kind. This framework was created in the efforts to encourage, promote, and assist interested institutions to have a regulated way in which they could join the cryptocurrency marketplace within New York. Paypal also works in Tandem with the Paxos Trust Company, another American company, to increase security. Users can also rest assured that Paypal has dabbled in this area before, once offering services with Facebook’s digital currency, Libra. Although this was later suspended, many financial regulators took note of their efforts.
This initiative continues to excite many cryptocurrency enthusiasts as the path to widespread adoption becomes more clear than ever before. On the business front, PayPal has also taken an advantageous position to help lead the charge toward digital currency development by central banks and large corporations. Dan Schulman from PayPal shares that working with regulators on CBDC’s is still among the company’s goals.