The PayPal Impact: Will Cryptocurrencies go Mainstream with the Entrance of PayPal?
PayPal is allegedly preparing to start trading cryptocurrencies to its 325 million users directly- with openings for blockchain professionals popping up on its career website. The story began with a CoinDesk report on 22nd June 2020, which claimed that high profile individuals familiar with PayPal confirmed that the company is developing a direct buying and sales portal for digital currencies in its native app, and its subsidiary, Venmo.
Besides, “they are going to have some built-in wallet functionality so you can store it there,” the source told CoinDesk. The source also stated that PayPal “would be working with multiple exchanges to source liquidity,” and that the portal could be expected to go live in about three months.
While PayPal has not come out clean on this news, the company’s history suggests that an entrance into the crypto space is highly likely. After all, PayPal has brushed up against cryptocurrencies in the past; but, this would be the first time that the company dipped its toes directly into the crypto world.
The 325m users
It is evident that the entrance of a company as big as PayPal into the crypto world could significantly benefit cryptocurrency in terms of exposure to the masses.
Possibly, payment firms that have embraced cryptocurrencies have already been some of crypto’s biggest “gateways” into the mainstream business world. Digital currencies already have a strong foundation in the payments sector, with several FX and Casinos embracing cryptocurrencies as a means of depositing and withdrawing winnings.
But, when major financial players, like PayPal, consider supporting cryptocurrency trading, it brings a sense of trust and stability to the crypto market. Besides, other types of fintech companies that have adopted cryptocurrencies have attracted a lot of attention from VCs and other private investors.
Revoult, a UK-based “challenger bank” and investments app that started allowing its customers to use crypto in early 2017, raised a whopping $500 million, bringing the firm’s valuation to $5.5 billion.
With a market valuation of almost $200 billion, PayPal may not need funds from private investors- indeed. This is because PayPal is not a start-up and has access to a functional infrastructure, where quick integration of new offerings is always possible. The masses will use the opportunity to invest in cryptocurrencies through PayPal because of PayPal’s trusted brand.
PayPal’s entry into the crypto world might ignite the beginning of cryptocurrency’s mainstream adoption and make the industry to be more consolidated. This will further create a boom in the asset tokenization and more stable blockchain use cases.
Lastly, PayPal may benefit the cryptocurrency industry by acting as a bridge linking crypto users with traditional finance, and onboard new clients that have not used crypto before.
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