The payment service provider PayPal wants to allow its users to move their cryptocurrency holdings acquired via PayPal to external wallets. Not many crypto service providers offer that.
The choice of a crypto service provider is ultimately a matter of trust. As a rule, the bought stocks from one service provider cannot be moved to another or a separate wallet.
Crypto Coins: Where To Hold?
If a crypto investment now explodes, will the service provider be able to liquidate and cash it out for the customer? What if the service provider goes bankrupt? A crypto service provider that manages its customers’ inventories is only good when it comes to convenience. Chic charts offer an overview of the portfolio; interactions are possible at any time using more or less convenient apps. Trading is straightforward.
In the end, however, it is not much different with crypto assets than with gold, for example. A certificate of ownership of the precious metal is good, but holding the gold in your hands is better.
PayPal Announces More Controls For Customers
Paypal now seems to want to follow this philosophy as well. At the Coindesk conference Consensus 2021, PayPal manager Jose Fernandez da Ponte confirmed that his company wanted to give its crypto customers the option to withdraw their holdings from PayPal and store them in their wallets. “We want to make it as open as possible, and we want to give our customers a choice,” says da Ponte. “We want you to be able to take the cryptocurrency you bought from us with you and bring it to the location of your choice.”
Da Ponte also indicated that PayPal wants to establish itself as a “natural way” for governments to distribute central bank digital currencies (CBDCs) and stable coin. However, PayPal does not want to issue its stable coin. At least not yet – as Ponte added: “It’s still far too early for that.”
PayPal Consistently Implements Its Crypto Strategy – In The USA
In the USA, the users have been able to buy cryptocurrencies – specifically bitcoin, Ethereum, Bitcoin Cash, and Litecoin – since autumn 2020. In March, PayPal expanded its crypto integration. Since then, users have been able to pay with cryptocurrency. However, retailers do not receive the coins but receive the equivalent value in money from PayPal.
In April, PayPal introduced cryptocurrency trading at its subsidiary Venmo, a US-only instant payment service provider. That PayPal has further ambitions can be seen not least from the acquisition of the Israeli crypto administrator Curv in March of this year. Curv offers a cloud-based infrastructure for the secure management of digital currencies.
So far, none of the crypto-related functions exist in Europe. Whether and when PayPal will also open the crypto market in this country can be described as entirely open. At least this year, the status quo is unlikely to change.