PayPal announced Wednesday Oct. 21, 2020 that it is launching its own cryptocurrency service, allowing people to buy, hold and sell digital currency on its site and applications. Customers will also be able to use cryptocurrencies to shop at any merchant in the PayPal network starting from early 2021.
WARNING - PayPal’s cryptocurrency service does not allow crypto to be withdrawn, deposited or transferred to a different user at this time. Once you buy the coins, they stay in your account until you sell.
Not your keys, not your coins!
Note - Payments will be settled through fiat currencies, similar to many existing crypto merchant solutions like BitPay. This means that the merchants will be receiving fiat, as PayPal will take care of the conversion.
Service rollout starts off first in the U.S only, than select global markets in the first half of 2021. 49 out of 50 U.S. states have coverage at launch, with Hawaii, excluded from the list due to the states “double-reserve” requirement.
Essentially companies offering crypto services in Hawaii MUST hold just as much fiat as their clients held crypto. Previously licensed crypto companies, including Coinbase, fled the state arguing that the mandate was irrational, untenable and bad for consumers.
- Coins initially supported are Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH) and Litecoin (LTC)
- PayPal obtained a conditional cryptocurrency license from the New York State Department of Financial Services, commonly known as a BitLicense
- Users will be able to purchase crypto directly through the app, PayPal will feature its own digital wallet service.
- PayPal said buy, sell and hold features would be live within the next few weeks but for some users, the features are already available.
- There's a $10,000 weekly buying cap and a $50,000 limit per 12-month period. All trades must be executed in U.S. dollars, PayPal said.
PayPals fee structure for the crypto service is a bit convoluted and there are "tiers", the transactions fees are based on how much crypto you buy/sell.