With the announcement that PayPal will now enable trading and payments in crypto, the world’s most popular digital currency – Bitcoin has jumped in price. At last glance, Bitcoin is trading over USD$ 12,700 – earlier today it was under $12,000. Shares in PayPal neared an all-time high.
PayPal has partnered with Paxos, a digital asset platform that embraced regulation from inception, to offer crypto services – an important strategic step that allows PayPal to be lockstep in line with regulators.
PayPal is an establishment Fintech that services 346 million active accounts including more than 26 million merchant accounts. This announcement represents a benchmark event in the global acceptance of digital currency. PayPal says that consumers will be able to instantly convert crypto to fiat currency, with a certainty of value and no incremental fees. Expect other financial services firms to fall into line and do the same. The world can no longer ignore digital currency as a novelty and must acknowledge the benefits of transferring value in a low friction, low-cost environment.
Initially, PayPal will allow users to buy, hold, and sell Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. PayPal will commence this service to its US customers, then plans to add more geographies and features over time. P2P service Venmo will also facilitate crypto transfers.
Meanwhile, central banks around the world continue to review the possibility of a Central Bank Digital Currency (CBDC). The thesis is that by leveraging distributed ledger technology, consumers and businesses around the world can speed up payments and transfers and remove costly middlemen that tend to charge excessive fees to move currency around.
Policymakers and regulators will continue to play catch up to digital assets in general. Fear of the unknown may slow things down but Bitcoin and its decentralized existence has charted a path that may represent the future of all currency.