PayPal has been at the forefront of the digital payment revolution for more than two decades.
The PayPal platform enables over 300 million users and merchants in over 200 countries to participate and flourish in the global economy by leveraging technology to make financial services and commerce more simple, affordable, and secure.
Paypal Holdings has announced an increase in cryptocurrency purchase restrictions for qualified PayPal clients in the United States to $100,000 per week, with no yearly buy limit.
The COVID-19 epidemic, as well as growing interest in digital currencies from central banks and consumers, are driving a rapid transition toward digital payments and digital representations of value in the sector.
However, popular acceptance of cryptocurrencies has historically been hampered by their limited value as a medium of exchange due to their volatility, cost, and transaction speed.
The promise of sophisticated technical platforms opens up the prospect of digital currency mainstreaming.
What effect did PayPal create?
PayPal has expanded at an astounding rate since being split off by eBay in 2015, and it is now available in 200 countries.
Due to its huge worldwide reach, it takes a wide range of currencies and manages currency conversions when it comes to overseas payments.
With the firm at the forefront of internet payments, it was only a matter of time before it started paying attention to digital currencies
Since launching its cryptocurrency capabilities in the United States in October 2020, the company has been actively engaging with customers to better understand their needs in order to ensure that the company is providing a trusted and secure platform for customers to buy, hold, sell, and pay with cryptocurrency.
PayPal’s acceptance of bitcoin will begin in the United States, with plans to expand to other nations at a later date.
When the news was originally released in October 2020, industry analysts regarded it as a game-changer for digital currencies.
With all of this occurring merely because it was announced that PayPal will accept bitcoin, what will happen when it becomes widely used on the payment platform?
Some believe that this will put bitcoin firmly on the path to $100,000 within the next three years.
PayPal began cryptocurrency buying and selling in the United States earlier this year, subsequently allowing consumers to utilize their digital coin holdings to purchase at the network’s millions of merchants.
The business believed that its entry into the new asset class will increase the worldwide use of virtual coins and prepare its network for future digital currencies produced by corporations and central banks.
In the midst of soaring cryptocurrency values, more traditional financial institutions have begun to provide their clients, both individuals, and institutions, access to digital assets.
Increasing Cryptocurrency’s Utility in Digital Commerce
The clients would be able to utilize on their cryptocurrency holdings as a financing source to pay at PayPal’s 26 million merchant’s worldwide beginning in early 2021.
Even the merchants will not incur for any of the additional integration or cost because all transactions will be paid in fiat currency at their current PayPal rates.
In effect, bitcoin simply becomes another financing source within the PayPal digital wallet, enhancing cryptocurrency users’ utility while resolving prior concerns about the volatility, cost, and speed of cryptocurrency-based transactions.
MasterCard warns that coins will be added, in accordance with our digital currency policies, which concentrate on consumer safeguards and compliance.
Square introduced bitcoin purchasing to its Cash App in 2018, but in October it made its crypto support clear: Square thinks that cryptocurrency is an instrument of economic empowerment and provides a way for the globe to participate in a global monetary system, which matches with the company’s goal.
One of the most significant roadblocks in bitcoin’s history has been figuring out how to successfully make digital currency a mainstream choice for consumers.
With PayPal now giving a realistic way for spending bitcoin, it may begin to gain widespread use.
It may be especially beneficial for international transfers, given PayPal now charges a hefty fee for cross-currency transactions. If a business and a client in different countries both used bitcoin, the costs might be considerably reduced, making international purchases more appealing.
PayPal’s statement in October that it will add crypto purchases to its wallet in Q4 2020 fuelled a bitcoin bull run that began in March amid the COVID-19 shutdown.
It also followed on the heels of Square (SQ) revealing earlier in October that it had purchased 4,079 bit coins for $50 million as a balance-sheet investment.
The headlines around PayPal’s actions, which increased the potential market for crypto use by non-experts by hundreds of millions of individuals overnight, have been significant.
Despite all of this attention, there are a number of additional trends and issues that will be accelerated by these announcements.
This year, PayPal will also offer the option to purchase using cryptocurrency.
During the company’s Q4 earnings call last week, CEO Dan Schulman stated that crypto trade volume on PayPal “exceeded expectations” and that the company’s efforts thus far are “simply the beginning of a comprehensive roadmap” surrounding crypto.
However, even providing the choice is a step toward broad acceptance since it validates the concept of cryptocurrencies as genuine cash.
With a few exceptions, it is currently not being utilized in this manner; instead, it is being hoarded as digital gold.
In retrospect, the initiatives by PayPal and others may be regarded as the tipping moment for increasing consumer usage, pro-growth regulatory measures, and expanded acceptance across the board.