PayPal has announced an extension of its cryptocurrency trading platform to UK customers.
This is a significant change of tune by the company, whose former CEO Bill Harris described Bitcoin in 2018 as “a useless payment system, and a ridiculous store of value”.
Now, however, the electronic payment service has slowly begun integrating cryptocurrencies on a large scale, with the moves described as part of an incremental new strategy by new CEO Dan Schulman as he revealed details in his recent Q2 reporting call.
“We continue to be really pleased with the momentum we’re seeing on crypto,” he said.
“We’re going to launch, hopefully, maybe even next month in the UK, open up trading there.”
Trading of crypto assets such as Bitcoin (BTC), Ethereum (ETH), and LiteCoin (LTC) is planned to arrive for UK users by the end of August. Currently, PayPal allows cryptocurrency transactions up to $100,000.
However, PayPal retains control of user’s cryptocurrency in a move reminiscent of traditional centralised financial practices, with no mechanism for transfers to private wallets.
This leads to the ‘not your keys, not your coins’ argument.
Jose Fernandez da Ponte, Vice-President for Blockchains, Crypto, and Digital Currencies suggested this will be a future feature incorporated into the Venmo platform.
Venmo – an easy payment app owned by PayPal – has become a primary facilitator of cryptocurrency trading for the company. The app is popular in the United States, but has made little impact on the British market.
Schulman indicated that Venmo is preferential as it can be used easily in day-to-day commerce, also noting the app’s rapid growth to 70 million users and revenues in excess of 180%.
“We’re also seeing strong adoption and trading of crypto on Venmo,” he added.
“In this quarter, we expanded the Venmo value proposition to allow merchants and consumers to pay for goods and services.”
Crypto in commerce seems to be the predominate focus of PayPal, although its ‘super app’ will operate a centralised trading exchange, this is a competitive space with the likes of DashDirect launching earlier this week.
Automated Clearing House (ACH) sits at the core of PayPal’s market-dominating strategy, allowing vendors and merchants to set-up direct debits to user’s crypto wallets.
“We’re working right now on transfers to third-party wallets, and we really want to make sure that we create a very seamless process for taxes and tax reporting,” Schulman explained.
“And so we’re really looking at how do we integrate that into both the trading and the buy with crypto on our platform.”
Implementation of DeFi products into PayPal’s ecosystem is fundamental to the firm’s potential success in integrating commerce with mass adoption, a fact that doesn’t escape their CEO.
“How can we use smart contracts more efficiently?” he asked in the Q2 call.
“How can we digitise assets and open those up to consumers that may not have had access to that before?”
“There are some interesting DeFi applications as well. And so we are working really hard.”
Needless to say, PayPal’s moves on cryptocurrency are of huge significance for crypto adoption – with the platform representing an easy and widespread point of entry for new crypto users.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice
Disclaimer: We do not give advice on financial products.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.