Bitcoin Rises to $12.7K as PayPal Pushes for Mainstream Crypto Adoption

Bitcoin Rises to $12.7K as PayPal Pushes for Mainstream Crypto Adoption


Crypto markets see further gains as PayPal announces decision to support cryptocurrencies in 2021.


Earlier on Wednesday, Reuters reported that global payments giant PayPal is planning to enter the cryptocurrency market. PayPal officially confirmed the news later in the day, promising to make cryptocurrency “a funding source for purchases at its 26 million merchants worldwide.” 


Beginning from early 2021, over 346 million customers around the world will be able to make payments to its large network of merchants using crypto, according to PayPal. Cryptocurrencies like Bitcoin (BTC), Ether (ETH), Litecoin (LTC) and Bitcoin Cash (BCH) will be supported via the PayPal wallet and Venmo app.


Cryptocurrency payments will be settled through fiat currencies, similar to several existing crypto merchant solutions like BitPay. This means that merchants will receive even crypto payments in fiat, while PayPal handles the crypto-to-fiat conversion.


The payments giant partnered with Paxos Trust Company, a New York State chartered trust company which will provide cryptocurrency trading and crypto assets custodial services to PayPal for the benefit of PayPal users.


Through this partnership, PayPal became the first approved entity to be granted the virtual currency conditional license (commonly known as the BitLicense) by the New York State Department of Financial Services.


“We are proud to become the first company to receive a conditional virtual currency license from the New York State Department of Financial Services,” said Dan Schulman, president and CEO, PayPal. “This approval represents an important step forward in our goal to contribute to the evolution of the regulatory framework for digital currency and help our consumers safely and responsibly engage with cryptocurrencies.”


Besides cryptocurrency payments, PayPal users in the US will also be able to purchase crypto directly from their PayPal digital wallet. PayPal will now feature a cryptocurrency wallet where users can buy, sell and hold crypto via the PayPal apps.


PayPal is one of the largest global payment providers, with 346 million global active users and $222 billion in transaction volume in Q2 2020. In recent years, PayPal has come under fire for its alleged unfair practices against over 100,000 PornHub models, which goes against the tenets of cryptocurrency.


The payments company was initially a part of the Libra Association, the 28-member nonprofit organization created in June 2019 to oversee the creation of Facebook's digital currency, Libra. Eventually, it pulled out of the alliance first after the project was met with intense regulatory scrutiny.


Regardless, there was a positive impact on market sentiment immediately PayPal made the announcement. Bitcoin soared to a fresh 2020 high above $12.7K, representing a 6% gain in a 24-hour period. Similarly, other cryptocurrencies supported by PayPal's new crypto service; ETH, BCH and LTC rose 4%, 6% and 12% respectively.


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