This may be a pivotal step for crypto mainstream adoption. Following FinTechs like Revolut, FinTech giant PayPal will embrace crypto. PayPal announced that it will allow customers to hold bitcoin and other virtual coins in their online wallets and use it to shop and pay at the 26 million merchants on its network. The new service will be operated on the regulatory grounds of a NY Bitlicense in a partnership with Paxos Trust Company.
PayPal has also been granted a first-of-its-kind conditional BitLicense by the New York State Department of Financial Services (DFS). The new crypto service will be offered in partnership with Paxos Trust Company, a New York State-chartered trust company (see DFS press release).
It may be expected that this step will significantly accelerate the mainstream adoption of crypto. There is a commercial use case now. PayPal customers with their with 346 million active accounts can use Bitcoin, Ethereum, Bitcoin Cash, and Litecoin as a means of payment to 26 million merchants. Crypto payments via PayPal should also remove the obstacle of an hour-long confirmation time.
Starting with 2021, PayPal customers will be able to use their crypto holdings as a funding source to pay at PayPal‘s 26 million merchants. Like with Revolut, consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with certainty of value and no incremental fees. PayPal merchants will have no additional integrations or fees, as all transactions will be settled with fiat currency at their current PayPal rates.