PayPal to allow cryptocurrency buying, selling and shopping on its network

[fillippone]

<…>

Good looking now you can hold and save bitcoin not only on bitcoin wallet exchange like Binance or Huobi but now you available hold and then save your bitcoin assets in PayPal.

What is this nonsense? holding and saving bitcoins on exchange wallet is a terrible idea. Your bitcoin should stay in exchange wallet for the least possible amount of time.

Also your optimism about “bitcoin” on PayPal Wallet might be a little bit premature, as we are talking about Bitcoin CFD à la Revolut, for the moment.

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[AndySt]

Yeah, I heard the news, its really good that  PayPal now accepts bitcoin, so glad we can finally buy and sell our crypto on the PayPal platform , although it's not the actual bitcoin it's a virtual one,I guess this is what made bitcoin to start pumping, because with more adoption thre will be high demand for it in the market, and we all know the laws of demand and supply, but I fear they are some cons to this adoption like PayPal is a centralized platform and I do see some people tell stories about their experience using it, most of them complained of getting banned for no good reason, without been able to even collect money from their PayPal wallet,does it mean it's PayPal is not a safe heaven? .

In this case, each side has its own ideas about security. PayPal's view of security may not coincide with your view, as well as your opinion about good reasons The news is certainly good for the exchange rate, but it turns out to be a little funny situation when bitcoin, which was created for, among other things, to fight against such centralized payment systems, becomes one of the cogs in the mechanism. By the way, it is also funny that PayPal also did not seem to be burning with tender feelings for bitcoin, but the insidious reality forced them to change their beliefs. About safe haven. PayPal is a huge organization with a lot of customers and responsibilities to government regulators, and sudden doubts about your funds can lead to unpleasant consequences for your wallet. But the final decision is still always yours

[bryant.coleman]

Paypal is the middleman. They pay Paxos to do the actual Bitcoin buying/selling. I guess they don't want to become an exchange, they want to use BTC as another payment currency.

Well.. I read somewhere that PayPal is looking forward to acquire a number of cryptocurrency firms. BitGo acquisition is almost complete. Now they may be looking forward to acquire some of the exchanges and marketplaces. PayPal is having huge amounts of reserve funds and they can just create a shopping list and get whatever they want. Once they complete these acquisitions, they no longer need to be dependent on Paxos.

[abdulodoi]

<…>

Good looking now you can hold and save bitcoin not only on bitcoin wallet exchange like Binance or Huobi but now you available hold and then save your bitcoin assets in PayPal.

What is this nonsense? holding and saving bitcoins on exchange wallet is a terrible idea. Your bitcoin should stay in exchange wallet for the least possible amount of time.

Also your optimism about “bitcoin” on PayPal Wallet might be a little bit premature, as we are talking about Bitcoin CFD à la Revolut, for the moment.

Exactly my thought! Firstly, we do not know for sure how safe or cost effective paypal is, we all know how ridiculous their transaction fees can be and also how accounts get restricted just like that. Imagine you having some bitcoin there and then poof it's gone. Let's hope that we get the best out of their new service.

Also the idea of saving bitcoin in exchange wallet is just outward naive as we all know it's not a good idea to keep your fund in an exchange wallet. Maybe there's a language barrier here and he/she is not typing his thoughts out well enough. Whatever it may be, i hope that's not the logic he/she follows

[metenjean]

<…>

Good looking now you can hold and save bitcoin not only on bitcoin wallet exchange like Binance or Huobi but now you available hold and then save your bitcoin assets in PayPal.

What is this nonsense? holding and saving bitcoins on exchange wallet is a terrible idea. Your bitcoin should stay in exchange wallet for the least possible amount of time.

Also your optimism about “bitcoin” on PayPal Wallet might be a little bit premature, as we are talking about Bitcoin CFD à la Revolut, for the moment.

Exactly my thought! Firstly, we do not know for sure how safe or cost effective paypal is, we all know how ridiculous their transaction fees can be and also how accounts get restricted just like that. Imagine you having some bitcoin there and then poof it's gone. Let's hope that we get the best out of their new service.

Also the idea of saving bitcoin in exchange wallet is just outward naive as we all know it's not a good idea to keep your fund in an exchange wallet. Maybe there's a language barrier here and he/she is not typing his thoughts out well enough. Whatever it may be, i hope that's not the logic he/she follows

I still not trying with purchase bitcoin by PayPal and exactly we have pay payment fee when buying and selling bitcoin trough Paypal, I think is effective when paypal accept bitcoin and member can buy and sell bitcoin by using paypal account, but does any one think will give effective buy paypal with bitcoin and buy with local exchange in your country. When you purchase bitcoin with local exchange you don't need to pay fee and price based on market and how much money do you have, I think when you buy bitcoin trough paypal you have pay several percent fees or you transaction because I ever use paypal and sent money to the other take fees more than $7.

[fillippone]

PayPal is ending the beta to a restricted number of US users and is opening its service to the broad US customer base:

PayPal says it's opening up crypto services to all eligible U.S. users

PayPal said Thursday that it is opening up its nascent cryptocurrency services to all eligible U.S. users.

"We are pleased to announce that all eligible PayPal accountholders in the U.S. can now buy, hold and sell cryptocurrency directly with PayPal," the firm said in a statement.

On their statement they also stated that they raised the maximum purchase amount from 10k/week to 20k/week.

I want to be bullish on this news.
And even if this money is going to fellow into “fake BTC”, I hope this is a first step, either for the users or for PayPal, into the real BTC field.

[fillippone]

There is an interesting fact that surfaced via a Twitter thread:
Even if PayPal users buy BTC CFD, PayPal is obliged to back those purchases with real Bitcoins, without possibility to apply fractional reserve, as commanded by NY BitLicense.

Full thread:

The big deal about PayPal offering cryptocurrencies like $BTC, $ETH, $LTC and $BCH is that they have to back every single coin at the same amount and currency as they sell it to customers (even when you can't withdraw em). Why is that? Let me explain: 1/3

https://twitter.com/djangobits/status/1326831384598638592?s=21

2/3 Paypal and their custodian Paxos are operating under a NY Bitlicense. That's a regulatory framework necessary to operate in the state of New York.
See this press release:

https://www.dfs.ny.gov/reports_and_publications/press_releases/pr202010211

It says that Paxos is PayPal's custodian operating under Bitlicense.

https://twitter.com/djangobits/status/1326831389589852160?s=21

3/3 The Bitlicense regulatory framework has very clear requirements when it comes to custody of customer assets. It is published here:

https://govt.westlaw.com/nycrr/Document/I85908c7d253711e598dbff5462aa3db3?viewType=FullText&originationContext=documenttoc&transitionType=CategoryPageItem&contextData=(sc.Default)&bhcp=1

It says under 200.9:

https://twitter.com/djangobits/status/1326831398687305736?s=21

[aesma]

I didn't know that about the bitlicense, that's good. Now there needs to be some similar license elsewhere like Europe so that Paypal can offer the same security for crypto buyers there.

[bryant.coleman]

I didn't know that about the bitlicense, that's good. Now there needs to be some similar license elsewhere like Europe so that Paypal can offer the same security for crypto buyers there.

Bitlicense was deemed as anti-Bitcoin by most of the users. There may be some clauses present in it that are beneficial for the Bitcoin users, but overall it made trading of Bitcoins very complicated. Anyway, it is good that PayPal is forced to purchase cryptocurrency at one-to-one ratio. Since the users can't withdraw their coins as of now, this means only one thing - the prices are going to go up in the near future.

[jaysabi]

This is a crucial detail, as the ability to buy and hold doesn't bring any utility to bitcoin. There are plenty of places you can already do that, it wasn't a large obstacle. The real benefit of tying Bitcoin functionality into PayPal is getting access to the commerce side of it; being able to buy bitcoin and then spend it at any merchant that accepts PayPal. That would be a big deal. This, not so much.

They are still in testing phase and that is the reason why they haven't enabled withdrawals or payments. The news is that they will offer full fledged services from mid-2021 and then you will be able to transact your coins. I expect the withdrawal and transaction fee to be roughly in line with what we have with various cryptocurrency exchanges. Right now, it is just buying and holding.

Assuming they will eventually enable transferring bitcoin in and out and using coins for commerce transactions at anyplace that accepts PayPal currently, that will be a big deal.  I'm not sold on PayPal allowing buying Bitcoin alone being a game changer.  It's nice to have the option, but there are plenty of places to buy bitcoin already.

[Vishnu.Reang]

Assuming they will eventually enable transferring bitcoin in and out and using coins for commerce transactions at anyplace that accepts PayPal currently, that will be a big deal.  I'm not sold on PayPal allowing buying Bitcoin alone being a game changer.  It's nice to have the option, but there are plenty of places to buy bitcoin already.

Yes. There are plenty of places to buy Bitcoins. You can purchase from exchanges such as Binance/Huobi, peer-to-peer platforms such as Localbitcoins/Bisq or even from Bitcoin ATMs. But while these options may sound familiar for us, for the vast majority of the people out there, these options are complicated. They don't trust unregulated exchanges such as Binance. However, they would be ready to put their trust in PayPal, which is regulated and operating for more than two decades.

[Kavelj22]

Assuming they will eventually enable transferring bitcoin in and out and using coins for commerce transactions at anyplace that accepts PayPal currently, that will be a big deal.  I'm not sold on PayPal allowing buying Bitcoin alone being a game changer.  It's nice to have the option, but there are plenty of places to buy bitcoin already.

Yes. There are plenty of places to buy Bitcoins. You can purchase from exchanges such as Binance/Huobi, peer-to-peer platforms such as Localbitcoins/Bisq or even from Bitcoin ATMs. But while these options may sound familiar for us, for the vast majority of the people out there, these options are complicated. They don't trust unregulated exchanges such as Binance. However, they would be ready to put their trust in PayPal, which is regulated and operating for more than two decades.

You mean that people will trust the use paiements in crypto because they trust paypal as a monitor?  Maybe you 're right, just like campanies use bitpay and coinpaiements to manage their paiements in crypto. However, this wouldn't help that much because the lack of transparency within blockchain. Personally, i don't recommend you guys to use any kind of services requiring KYC.

[jaysabi]

Assuming they will eventually enable transferring bitcoin in and out and using coins for commerce transactions at anyplace that accepts PayPal currently, that will be a big deal.  I'm not sold on PayPal allowing buying Bitcoin alone being a game changer.  It's nice to have the option, but there are plenty of places to buy bitcoin already.

Yes. There are plenty of places to buy Bitcoins. You can purchase from exchanges such as Binance/Huobi, peer-to-peer platforms such as Localbitcoins/Bisq or even from Bitcoin ATMs. But while these options may sound familiar for us, for the vast majority of the people out there, these options are complicated. They don't trust unregulated exchanges such as Binance. However, they would be ready to put their trust in PayPal, which is regulated and operating for more than two decades.

Fair point. I didn't take into account that PayPal's stature as a large and trusted financial institution presents a new trusted place to buy bitcoin.  With Square and Coinbase already offering sales points though, there is still a lot of availability of large trusted financial institutions.

[celot]

I actually find it strange if someone buys bitcoin via PayPal, why not buy it directly in the market instead of buying PayPal you have to pay a transaction fee, it could take 3 $ to $ 4 when buying bitcoin or altcoin, even though there is no fee at all in the market and the process also faster. Maybe some just want to try whether you can really buy bitcoin directly on PayPal or not? I think it's better to buy on the market directly than via PayPal because we often get a PayPal account with problems, either a permanent limit or a temporary limit, and we must upload documents.

[mnporter2001]

Wonder who will this go. Paypall was a big Bitcoin hater all these years. Someone from USA should confirm if they can buy Bitcoin from their paypal account. For next year they are promising to also use all paypal merchants with Bitcoin.

But this is not the real Bitcoin on the Crypto market. it is Paypal's Bitcoin, you can only buy their Bitcoin but cannot move anywhere, and only use that Bitcoin to pay on their Paypal system. So in my opinion this is not a good news for Bitcoin, it is just a great marketing game of Paypal

[blockman]

I actually find it strange if someone buys bitcoin via PayPal, why not buy it directly in the market instead of buying PayPal you have to pay a transaction fee, it could take 3 $ to $ 4 when buying bitcoin or altcoin, even though there is no fee at all in the market and the process also faster. Maybe some just want to try whether you can really buy bitcoin directly on PayPal or not? I think it's better to buy on the market directly than via PayPal because we often get a PayPal account with problems, either a permanent limit or a temporary limit, and we must upload documents.

PayPal just showed stats that they have 85% of Binance's volume upon their launch. That's a no joke stats and that was somehow expected due to its popularity. (https://cryptobriefing.com/paypal-reaches-85-binance-us-volume-first-month/)
Now, why is it that it's really hype when they've announced it and to answer your question. There are still a lot of people who own PayPal account and have a balance on it yet they don't trust any actual crypto exchange for transfers. With the added feature PayPal made, they've helped them purchase crypto easier.

[The Sceptical Chymist]

With the added feature PayPal made, they've helped them purchase crypto easier.

Except that PayPal customers haven't actually purchased any real bitcoin that they have control of.  PayPal has custody of all the bitcoin you buy through them, so I really don't see the point of them doing this.  It's not as though people are crying out for an easy way to buy bitcoin simply in order to spend it on things they couldn't buy with PayPal.

I would never use this service unless I was able to deposit and withdraw bitcoin.  Somehow I suspect that the US government would not allow that due to money laundering concerns.  I'm pretty sure that's why Circle no longer provides that service and why Robinhood is offering basically the same thing as PayPal is.

Not your keys, not your coins.

[fillippone]

So, just to recap, PayPal numbers don’t look so bad after only one week from launch.


PayPal Now Handles $20 Million a Day in Bitcoin Trading Volumes

According to Paxo’s trading desk, itBit, some $4 million was exchanging hands daily before PayPal began offering bitcoin services on October 21st.

Now, around $25 million is traded a day, suggesting demand has increased by $20 million in the past three weeks.

We had a suspect when they raised and doubled the weekly maximum to 20,000 USD.
Of course I also expect the average PayPal user to be in the “weak hand” herd. So as they are now buying like there is tomorrow in a FOMO, the day Bitcoin will show a big red candle, they will be the first to sell.

With the added feature PayPal made, they've helped them purchase crypto easier.

Except that PayPal customers haven't actually purchased any real bitcoin that they have control of.
<...>
Not your keys, not your coins.

I do agree with both of you actually.
PayPal will be hugely important for the adoption, even if they provide their customers only shitty CFD’s.
One important aspect is btw that PayPal, as per Bitlicence, will effectively back those CFD’s with real bitcoins. So this  is why the effect has been felt on trading desks and markets.

Also, I can’t really see a no coiner that hasn’t bought a single satoshi until today passing from zero to self custody, while I see them evolving from nocoiner, to CFDer to Bitcoiner...slowly but steadily.

[blockman]

With the added feature PayPal made, they've helped them purchase crypto easier.

Except that PayPal customers haven't actually purchased any real bitcoin that they have control of.
<...>
Not your keys, not your coins.

I do agree with both of you actually.
PayPal will be hugely important for the adoption, even if they provide their customers only shitty CFD’s.
One important aspect is btw that PayPal, as per Bitlicence, will effectively back those CFD’s with real bitcoins. So this  is why the effect has been felt on trading desks and markets.

Also, I can’t really see a no coiner that hasn’t bought a single satoshi until today passing from zero to self custody, while I see them evolving from nocoiner, to CFDer to Bitcoiner...slowly but steadily.

The impact by them did huge on its very first week. I may not use the feature as others as well but for their customers that don't want to test the waters using other exchange, find it more secure through PayPal. I agree that the term will come with that bold part of evolution for their customers. As it will open the idea that someday they'll find out new knowledge about crypto due to their curiosity that there are other better ways of purchasing crypto through other means.

[exstasie]

Except that PayPal customers haven't actually purchased any real bitcoin that they have control of.  PayPal has custody of all the bitcoin you buy through them, so I really don't see the point of them doing this.  It's not as though people are crying out for an easy way to buy bitcoin simply in order to spend it on things they couldn't buy with PayPal.

Like any other exchange or broker service, the point is to collect fees. They are taking 1.5-2.3% off every buy and sell their customers make. That's a pretty penny.

What they aren't doing is exposing themselves to big money laundering risks. By not allowing crypto transfers, they can save a bundle on compliance and blockchain analysis services.

If they can make it work and generate decent growth without allowing crypto transfers, that's a win/win for their shareholders.