PayPal, the multi-billion dollar global payments platform, has announced that some clients will be able to both send and receive cryptos for in their accounts next year. Shares in the company traded as much as 4% higher on the news, and some commentators think that this event is responsible for Bitcoin's surge above the $13,000 mark. While US clients will be able to send and receive some of the major cryptos, including Bitcoin and Ethereum, there has been no word on how ownership of the private keys would work, or how US taxes may be handled. PayPal is also working to get a cryptocurrency licence from the New York State Department of Financial Services, which may fit into the new policy that was announced today.
Jack Choros, CMO at CryptoRadar.org commented the news:
PayPal is capable of exposing over 325 million users to the benefits of cryptocurrencies like Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Around 67 million people in the U.S. and Europe already own Bitcoin, and we can only expect this number to continue increasing.
Why it matters: Cryptos are going mainstream in a big way – and this may not be great for the industry as a whole. Decentralization was a founding goal for whoever designed Bitcoin, and with financial entities like PayPal entering the market, unforeseen dangers may follow. Frederick Coleman, VP of Growth at Blockonomics said that PayPal "like controlling things," he said that "the internet is filled with people complaining about stolen funds and locked accounts. Now, we are a competitor of PayPal, but we believe in openness and decentralization. PayPal doesn't, and that is very much against the core tenants of Bitcoin."
We know that the US government wants to increase oversight in the crypto sector, and by working with PayPal, it may be able to expand its capacity to monitor crypto transaction. The question of who will own the private keys is also vital, as PayPal could undermine one of the most important aspects of cryptos – which is the ability to own an asset without an intermediary.