Paypal’s move to cryptocurrency : What does it mean for you?

If anything, 2020 has been an exceptional year for cryptocurrency. Cryptocurrencies have managed to achieve several milestones this year, and Paypal entering the cryptocurrency market is one of them. The event has propelled positive investor sentiment for cryptocurrency and Bitcoin prices have broken an all-time high mark of $12000.

Paypal has one of the world’s largest merchant networks. Using Paypal’s digital wallet, account holders will be able to obtain high liquidity for their cryptocurrencies; Paypal’s seller base exceeds 26 million worldwide. Including Bitcoin, the company will be adding Ethereum, Litecoin, and Bitcoin Cash to its payment system.

But, is Paypal — the ultimate cryptocurrency digital wallet that digital asset holders were looking for? A cursory look at the terms of the agreement provided by the company will tell you, things are not as they seem. The Paypal system works this way: while making payments, PayPal will be converting cryptocurrency into relevant national currency. So, instead of receiving crypto as payments, merchants will be receiving converted value in Pounds or Dollars.

Using Paypal you are not using crypto assets to pay for goods and services, not really. You can buy and sell crypto only as an investment, but cannot make transfers or withdraw crypto assets from the cryptocurrency hub to the external cryptocurrency wallet. If cryptocurrency users do not have an associated key to their bitcoins they can essentially lose sovereignty over it. As the saying goes “not your keys, not your bitcoin.”

However, from a broader perspective, Paypal’s move into the cryptocurrency market is one massive piece of news. Prior to this, neither have regulators issued a license of this kind to any company operating in the magnitude of Paypal. 2020 is an exciting time for the cryptocurrency market given companies like MicroStrategy, Square, Robinhood and now Paypal is entering its sphere. Now 4% of total Bitcoins are owned by corporates. In addition to a large merchant base, Paypal has a huge user base of 350 million. This is going to further legitimize crypto as a currency.

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