PayPal to Allow Users Transfer Bitcoin and Ethereum to External Wallets
Payments giant, PayPal, is now offering users the feature they’ve always craved. Users can now move their digital currency to external wallets and hardware with zero bottlenecks.
PayPal announced the new development on Tuesday, highlighting users’ new ability to move funds off its platform. For a trusted fintech brand, this move could radically reposition the brand as one highly committed to meeting users’ needs.
An official statement reads thus:
Starting today, Paypal supports the native transfer of cryptocurrencies
What’s important to the markets is that anyone can move crypto from PayPal to other exchanges and wallets.
Users will begin to see roll-outs of the new feature immediately and within a week or two, everyone in the US will have it.
PayPal and Crypto: The Saga Begins
PayPal has a storied relationship with the crypto community. After launching its crypto service at the tail end of 2020, users could buy, sell, and hold four cryptocurrencies, including Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
However, users were forced to endure one irritating snag – they could not move crypto funds to third-party destinations such as Coinbase, Metamask, or hardware wallets.
Users are the highest beneficiaries of this new-found ability to move crypto elsewhere, especially when one considers that Venmo (a popular PayPal subsidiary) currently has several hundred million people worldwide using it to move money besides merchants who use it as a payment platform.
Zero Charge, But What’s the Catch?
With the new functionality, customers can now transfer coins into PayPal, send crypto to other PayPal users “in seconds,” and move crypto to external crypto addresses. But, is it really true that there are no fees?
For internal PayPal to PayPal transfers, fees are exactly zero. However, customers will foot the entire charge for network fees on external transfers. This depends on the blockchain and the crypto asset.
PayPal’s Crypto Plot
The payment provider still maintains its famous and ambitious plans for cryptocurrency even in the face of a financial misfortune that has seen the stock rattled in recent months. It’s playing the long game with crypto, with the full expectation that a significant portion of e-commerce will migrate to digital currencies.
The company’s SVP of Blockchain and Crypto, Jose Fernandez da Ponte, points out that this belief is behind the company’s zero charge on crypto transactions. The underlying drive for the company is to facilitate commerce using crypto, and not to operate an exchange, he says.
The SVP also contends that PayPal is keeping faith that more countries will adopt stablecoins and central bank tokens. This emerging culture aligns well with the company’s business model.
How Has Crypto Helped PayPal’s Bottom Line?
It’s hard to tell how much revenue the payment provider has earned from its crypto business. The company has chosen the coy path, preferring to be tight-lipped on how many people are using its Bitcoin and Ethereum service.
However, one can estimate (even if conservatively), by looking at Coinbase, Robinhood, and other big crypto businesses. Crypto transactions have dropped steeply, and it is likely to be any different considering the recent downturn in the market.
But, Fernandez da Ponte doesn’t seem to care. Where many believe that crypto winter is upon us, he focuses on the bright side. In his words, “the macro trend [of broad crypto adoption]” remains unperturbed.
Today’s announcement is PayPal fulfilling its promise at last year’s Consensus event, where Mr. da Ponte confirmed that offering users the ability to transfer digital currency was a high priority for the company.
History shows that it’s easy to lose out on the next big wave. Web3 is rapidly engineering a move away from the traditional finance environment. The payment provider realizes this and is preparing to be the “enabling connectivity” for the new era.