PayPal announces its adoption of digital currencies early next the year 2021
Cryptocurrencies are heading towards a new stage, the largest in its history, as its steps are accelerating towards digital payments and digital representation, the crisis of the Coronavirus pandemic has greatly contributed to this shift with the increasing interest in it by central banks and consumers, it was PayPal's announcement of launching a new service for its customers. By allowing them to buy and sell digital currencies is an important event to gain wider adoption of the use of crypto as a viable payment method, in a strong indication of a prevailing shift towards the adoption of cryptocurrency.
The online payments giant PayPal announced on Wednesday, October 18th, that customers would be allowed to keep Bitcoin, Ethereum, Bitcoin Cash, and Litecoin in its online wallet, and to make the most of the cryptocurrency, the company indicated that it could be used as a source of financing and shopping through the 26 million merchants registered on its network.
The company will only introduce this new service in the US in the coming weeks and it will be rolling out across specific international markets by 2021, PayPal has teamed up with the cryptocurrency startup Paxos to help launch its new service.
PayPal outperforms Facebook
The CEO of the company, Dan Shulman, said that the crypto market is witnessing rapid developments and that digital transformation is inevitable in the end, as cryptocurrencies have many advantages that qualify them for that, as they have speed, flexibility in the payment system, ease of access and the ability to transfer money smoothly and simply.
PayPal also revealed in its statement that it has acquired a conditional Bitlicense license by the New York State Department of Financial Services, that Bitlicense will help encourage, promote, and assist organizations interested in having a well-regulated way to access the New York cryptocurrency market.
It is noteworthy that the social networking company Facebook announced last year its plans to launch its own cryptocurrency, "Libra", in mid-2020, which would have supported Facebook services, which would gain its currency a wide base of popularity among merchants and consumers, but it faced a violent attack and major regulatory restrictions and lost support from companies That she supported.
It seems that PayPal has outdone it and did not excuse the mistake that Facebook was subjected to, as it said that it would be keen to work with central banks and regulators from around the world, with the aim of participating in a serious way to define and coordinate the direction of cryptocurrencies and the role they will play in the future of financing.
News reports said that many central banks around the world, including the Federal Reserve Bank and the European Central Bank, are studying the idea of launching their own digital currency and its mechanism of action, at the same time the People's Bank of China is rushing to conduct initial experiments for its proposed digital currency.
PayPal wasn't the first but it is worthwhile
PayPal also revealed in its statement that it has acquired a conditional Bitlicense license by the New York State Department of Financial Services, that Bitlicense will help encourage, promote, and assist organizations interested in having a well-regulated way to access the New York cryptocurrency market.
It is noteworthy that the social networking company Facebook announced last year its plans to launch its own cryptocurrency, "Libra", in mid-2020, which would have supported Facebook services, which would gain its currency a wide base of popularity among merchants and consumers, but it faced a violent attack and major regulatory restrictions and lost support from companies That she supported.
It seems that PayPal has outdone it and did not excuse the mistake that Facebook was subjected to, as it said that it would be keen to work with central banks and regulators from around the world, with the aim of participating in a serious way to define and coordinate the direction of cryptocurrencies and the role they will play in the future of financing.
News reports said that many central banks around the world, including the Federal Reserve Bank and the European Central Bank, are studying the idea of launching their own digital currency and its mechanism of action, at the same time the People's Bank of China is rushing to conduct initial experiments for its proposed digital currency.
PayPal wasn't the first but it is worthwhile
Over recent years fintech companies have been involved in investing in cryptocurrencies. Square, a mobile payments company that PayPal rivals, allowed some customers to buy and sell bitcoin through its application about three years ago, and this app have been widely rolled out since then. Robinhood Markets also allows stock trading apps to buy and sell cryptocurrencies, but the launch of PayPal is worthwhile given the size of the company, it has 346 million active accounts around the world, and about $ 222 billion in payments were processed during the second quarter of this year.
This bold decision helped boost the company's shares, which rallied strongly by 5.5% and recorded the highest closing level since September 2nd.
Despite the existence of Bitcoin and other cryptocurrencies for more than a decade, it is still trying and struggling hard to become a widely payable currency, and cryptocurrencies are famous for their high volatility, which is attractive to traders, and despite the large gains that can be achieved from them, they have But it is a high risk for merchants and shoppers, and transaction performance is also slower and more expensive than other mainstream payment systems.
The previous perception toward Bitcoin and other digital assets mostly between Wall Street and the financial world has been largely negative, as it was rumored that they are mostly used in criminal transactions and money laundering. Fintech companies such as Square, PayPal, Robinhood, and more have shown a level of confidence in These digital assets by allowing their users to purchase and keep them.
Many expect that the new payment system that PayPal may provide will address the problems and risks of cryptocurrencies, since the payments will be settled in traditional currencies such as the US dollar, and this means that it will reduce risks, the most important of which is the reduction of high price fluctuations.
The company says it will consider and handle cryptocurrency risks in a completely different way with the goal of offering maximum security to clients.
PayPal's announcement comes at the same time that some central banks have revealed that they are studying plans to develop their own cryptocurrencies, and in the wake of the cryptocurrency project Libra announced by Facebook in 2019, which met with strong regulatory objections, it is worth noting that PayPal was among the founding members of this project but withdrew After a few months.
This bold decision helped boost the company's shares, which rallied strongly by 5.5% and recorded the highest closing level since September 2nd.
Volatility
Bitcoin gained significant bullish momentum after PayPal's decision to hit its highest level since July 2019, reaching $ 12,494, to surpass the leading cryptocurrency its annual gains for this year, which is about 75%, and the currency continued on its upward path until it broke through the $ 13,000 level to reach a new record high. For 2020 at $ 13,800.Despite the existence of Bitcoin and other cryptocurrencies for more than a decade, it is still trying and struggling hard to become a widely payable currency, and cryptocurrencies are famous for their high volatility, which is attractive to traders, and despite the large gains that can be achieved from them, they have But it is a high risk for merchants and shoppers, and transaction performance is also slower and more expensive than other mainstream payment systems.
The previous perception toward Bitcoin and other digital assets mostly between Wall Street and the financial world has been largely negative, as it was rumored that they are mostly used in criminal transactions and money laundering. Fintech companies such as Square, PayPal, Robinhood, and more have shown a level of confidence in These digital assets by allowing their users to purchase and keep them.
Many expect that the new payment system that PayPal may provide will address the problems and risks of cryptocurrencies, since the payments will be settled in traditional currencies such as the US dollar, and this means that it will reduce risks, the most important of which is the reduction of high price fluctuations.
The company says it will consider and handle cryptocurrency risks in a completely different way with the goal of offering maximum security to clients.
PayPal's announcement comes at the same time that some central banks have revealed that they are studying plans to develop their own cryptocurrencies, and in the wake of the cryptocurrency project Libra announced by Facebook in 2019, which met with strong regulatory objections, it is worth noting that PayPal was among the founding members of this project but withdrew After a few months.