PayPal’s new offering enables users to hold, trade, and buy Bitcoin and other cryptocurrencies using their wallets.
Global payment giant PayPal launched a new crypto service called Cryptocurrencies Hub, which allows a select group of users to hold, trade, receive, and purchase Bitcoin and altcoins within their PayPal accounts.
According to PayPal’s latest updates in terms and conditions, apart from crypto sale and purchase, users can convert between PYUSD and other crypto assets, and access market information and content.
The firm also noted that when you buy cryptocurrency, you are not holding digital coins or tokens. Instead, you are buying a record of ownership of those coins or tokens.
“Any balance in your Cryptocurrencies Hub represents your ownership of the amount of each Crypto Asset shown. You will not hold the digital Crypto Assets themselves in your Crypto Asset balance.”
Additionally, some of the features are only accessible to a select group of users. To use PayPal Cryptocurrencies Hub, users need to meet a number of conditions, including personal account and balance account in good standing, verified identifying information, and select locations.
More KYC in Crypto
PayPal will require you to provide your name, physical address, date of birth, and taxpayer identification number. This information is used to verify your identity and to comply with anti-money laundering regulations.
PayPal Cryptocurrencies Hub is currently only available in select countries. You can find a list of supported countries on the PayPal website. Unfortunately, PayPal does not allow residents of Hawaii to use PayPal Cryptocurrencies Hub.
The move came a few days after PayPal announced the coming launch of its own stablecoin PayPal USD (PYUSD). Like USDT and USDC, PayPal’s stablecoin is backed by the U.S. dollar, US treasuries, and cash equivalent assets.
PayPal is big on cryptocurrencies but the company’s rush move has been criticized for a number of reasons, including particularly the lack of decentralization, privacy concerns, and smart contract vulnerabilities.
Crypto experts previously underscored potential vulnerabilities associated with the PYUSD smart contract, cautioning that it could become susceptible to hacking attempts.
Payment Entities Eye on Crypto Solutions
Payment entities are becoming more proactive in integrating cryptocurrency into their services. PayPal is not the only company working on developing crypto payments. Other companies, such as Mastercard and Visa, are developing solutions that will allow users to pay gas fees with traditional payment methods.
Visa reportedly is working on a new solution that will allow users to pay gas fees with Visa cards. This solution will use Ethereum’s ERC-4337 standard and a paymaster smart contract.
The way it works is that the user will trigger an Ethereum transaction via their wallet. The transaction will then be sent to the paymaster, which will calculate the gas fee and charge Visa using Cybersource. A digital signature will then be instantly validated and attached to the transaction before being sent to Ethereum. The paymaster will verify the signature and pay the gas fee.
The solution will eliminate the need for users to calculate the purchase of ETH to pay the gas fee. Instead, they can simply use their Visa card to pay the fee directly. This will make it much easier for users to use Ethereum and other blockchain-based applications.
Payment giants have the potential to bring a lot of legitimacy and credibility to the crypto space. Their involvement could help to attract more mainstream adoption and investment. Additionally, payment giants could help to improve the usability and accessibility of cryptocurrencies, making them more convenient for everyday use.
On the other hand, some people worry that payment giants could stifle innovation in the crypto space. They could potentially use their market power to control the price of cryptocurrencies or to censor transactions. Additionally, some people worry that payment giants could eventually take over the crypto space, leaving it centralized and controlled by a few big players.