PayPal allows users to withdraw Bitcoin to external wallets

[rdbase]

At least they heard of what their customers demand.

But in exchange for this action, as I read in the article Paypal was planning to increase their identity verification process for users before they can send out their Bitcoin or other altcoins completely outside the Paypal's wallet.  So what it is?

However, it turns out better than before because you are now able to transfer your fund to an external wallet.  I think this system will be going to adopt them is the same as other custodial wallets locally.  The same in our local wallet, there's no fee when you send from the same wallet and if it's external transaction will vary only on the network fee and which is sounds great.

Just read the article from a different source:
https://cryptobriefing.com/paypal-adds-cryptocurrency-withdrawals-and-deposits/

Yeah but having it so their customers were only about to buy their crypto on their platform and not telling them they were not allowed to withdraw it for over a year pretty much made it a pointless process.
But now those customers are able to, the price of their asset has gone done since they bought it off of paypal when it was first introduced.
Also having their customer front the transaction fee(s) and probably some handling fee aswell knowing paypal from what they already do to their fiat based customers and their transactions already (paying by good and services) adding an additional transaction fee to send payments.

[DdmrDdmr]

It seems like the TOS were updated yesterday to reflect the changes. Besides some minor additions, there’s an explicit section on sending crypto assets and another one on receiving them. I don’t think there is anything exceptionally weird here (do note if you see something odd), but they make no explicit reference to the type of BTC supported addresses for inbound/outbound TXs (which likely should).

The information on Fees and Pricing has also been updated, being the following something to read with consideration:

The fee we will charge you is our estimate of the fee the network will take to process your transfer. The fee that you will pay to us may be higher or lower than the actual fee paid to the network, based on market conditions. If the actual network fee is higher, that amount is PayPal’s or its Service Provider’s responsibility. If the actual network fee is lower, PayPal or its Service Provider will retain the difference.

We can bet that it will be lower (in the above context) almost every time …

TX Limits state that:

•   Weekly send limit: Crypto Assets totaling the equivalent of $10,000 USD
•   Minimum “send” transfer amounts:
o   BCH: 0.01 BCH
o   BTC: 0.001 BTC
o   ETH: 0.01 ETH
o   LTC: 0.01 LTC
We may change the above limits for safety, security or other lawful reasons. You can view your current limits by logging into your personal PayPal account.

Those are the limits I wanted to know about.

Restricted Activities states that:

•  Send or receive Crypto Assets for any unlawful purpose or in relation to any unlawful activity, including in violation of any applicable sanctions regime;
<…>
Actions We May Take if You Engage in Any Restricted Activities
the actions we may take include, but are not limited to, limiting your access to or use of the Cryptocurrencies Hub, and/or suspending your Cryptocurrencies Hub, immediately and without penalty to us, including limiting your ability to buy or sell Crypto Assets. You authorize PayPal to seize your Crypto Assets if we believe a transaction relating to those Crypto Assets involves money laundering, terrorist financing, fraud or any other type of crime.

Ups… (not totally unexpected though).

Liability for Unauthorized Transactions, Errors and Support:

PayPal also works to prevent unauthorized transfers of Crypto Assets, and will reimburse you for unauthorized transfers out of your Cryptocurrencies Hub in the form and quantity of the Crypto Asset that was removed from your account, up to a maximum lifetime cap of an equivalent of $50,000 USD (based on the U.S. Dollar value of the Crypto Asset at the time of the unauthorized transaction), as long as you cooperate with us, and follow the procedures described below.

The above are some extracts I considered interesting, but it may be worth a proper read for anyone interested. I’ve looked at an archived version of the TOS, but neglected playing spot the difference between the two versions.

See: https://www.paypal.com/us/webapps/mpp/ua/cryptocurrencies-tnc

[m2017]

This is good coming from PayPal but question is how much fees are they going to charge for that withdrawal, and somehow I highly doubt this is going to be only transactional fee without anything extra.

Without additional withdrawal fees, the whole point of bitcoin in paypal is generally lost. Otherwise, what will paypal earn on? All this paypal started in order to earn. Therefore, I also expect that the transaction will be charged an additional fee on top of the commission already due on bitcoin network.

[sklopan]

And it's really very convenient. Considering that now many people work with cryptocurrency in order to simply protect themselves and not show their income.

[pawanjain]

Now that's a good move from Paypal. Although it might not benefit Paypal at revenue level but it is facilitating an ever wanted service from their side.
There were so many negative talks earlier when Paypal had restricted the withdrawals in their wallet but now since they are allowing the withdrawals it seems like this might bring a positivity in the market.
The last bull run started when Paypal had announced that it is accepting bitcoins and may be this move by them may give bitcoin a little spike in the price.
Let's hope for the best of bitcoin and see how it goes.

[hosseinimr93]

Without additional withdrawal fees, the whole point of bitcoin in paypal is generally lost. Otherwise, what will paypal earn on?

Even if they don't charge extra withdrawal fee, they will still earn from the spread between sell and buy prices.
Of course, I doubt they process withdrawals without extra fee and like other custodial services, they will probably charge extra fee. 

[a1 Hashrate LLC2022]

If they add Bitcoin LN, their users will realize they don't need Paypal anymore

Wrong sellers will realize they don't need Paypal if they have a good reputation.

And buyers will need paypal when they do not trust a seller.

So there is room for both.

I want to follow up a bit I read a post which gave a pdf link to the new bill for btc gains.

there is a 200 usd exemption. I made this post on my main accounts difficulty thread.

We will need to wait and see how this unwinds.  BTW this bill that is up for passage for sale of BTC for cash or stablecoin

Has a $200 gains exception this is a federal bill.

https://www.lummis.senate.gov/wp-content/uploads/Lummis-Gillibrand-Responsible-Financial-Innovation-Act-Final.pdf


I read it a a real boost to btc

"SEC. 201. GAIN OR LOSS FROM DISPOSITION OF VIRTUAL CURRENCY.
(a) In General.—Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139I the following new section:
“SEC. 139J. GAIN OR LOSS FROM DISPOSITION OF VIRTUAL CURRENCY.
“(a) In General.—Gross income shall not include gain or loss from the disposition of virtual currency in a personal transaction (as such term is defined in section 988(e)) for the purchase of goods or services.
“(b) Limitation.—
“(1) IN GENERAL.—The amount of gain or loss excluded from gross income under subsection (a) with respect to a disposition shall not exceed $200.
“(2) AGGREGATION RULE.—For purposes of this subsection, all dispositions which are part of the same transaction (or a series of related transactions) shall be treated as one disposition.
“(3) OTHER DISPOSITIONS.—For purposes of this subsection, subsection (a) shall not include dispositions in which virtual currency is sold or exchanged for cash, cash equivalents, digital assets (as defined in section 9801, title 31, United States Code), or other securities or commodities."

Quoted from link above


So if I buy a 1000 dollar miner using 801 worth of btc  that went to up to 1000 it is a tax free gain.

Means a lot of book keeping.

It could also be I buy 800 worth of btc it goes to 999 and I buy a gpu.


It counts as no gain of the 199.

I could also have 400 in purchased btc and pay 599 for pc also no tax on that gain.

This is a big encouragement to making more purchases with btc.

Obviously you need to track the value of the btc you spend.

Now that paypal lets you pull btc from its account it will encourage spending some btc.

I am going to buy 100 in btc today on my paypal account knowing that if it goes up to 299 and I spend it it is a non taxable event.

-snip
...

[/quote]

So I now have $97.45 worth of btc it dropped since I paid 100 for it.

If that BTC goes to $299 I would be up 199 a fully exempted gain if I use that to buy gear from a seller like newegg.

This is quite a tax break if you understand it and use it properly. It ties in with paypal allowing btc withdrawal.

I have 3 accounts with paypal I could do 100 in all three and buy gear when  the btc is worth 299 or  I would get 597 dollars of tax free gains.

So it helps a small btc investor.

Note all USA tax laws and the fed law is not passed as of today.


Above is a case that more then makes up for the fees.

This is good coming from PayPal but question is how much fees are they going to charge for that withdrawal, and somehow I highly doubt this is going to be only transactional fee without anything extra.

Without additional withdrawal fees, the whole point of bitcoin in paypal is generally lost. Otherwise, what will paypal earn on? All this paypal started in order to earn. Therefore, I also expect that the transaction will be charged an additional fee on top of the commission already due on bitcoin network.

so the bitcoin + paypal setup is very good if you want a 199 or less tax break .

Its small but in my case I can set it up  3 times which is a tax exemption on 597 dollars.

Still small but a real break if the law passes.

It also means  you do not need to track any btc you spend if the gain is under 200.

Prior to this every time I spent btc I had to account for it. The old law was spend 20k in btc in a year and all must be accounted for.

Now I could spend 20k and as long as the gain on the spends is under 200 its exempt.

trust me after my 2020 return was sent in with 200 pages of transactions this will be very helpful for me.

BTW still waiting for my refund it has been over 8 months since I filed the 2020 return. so far 1 week longer than my 2019 return took to be refunded.

[Rikafip]

t direction.
I think most will continue to keep their BTC the way they have done so far, because if PP was their crypto bank, they will not see this option as an advantage.

I agree, and I think that's the main reason why PayPal introduced this change as they know their users and they concluded that even if they allow people to move crypto to their own wallet, majority will still keep it on PayPal, as usual.

t direction.
Still, maybe this opportunity will attract some new customers who know the benefits of controlling their private keys. If they were to pull off a smart business move, then they should lower the service fee so that they are competitive with those who still charge dearly for it.

I remember when PayPal first introduced thing thing, many people complained how that is not really good news as people couldn't move their crypto, but I've always seen PayPal as an useful idiot who will help the bitcoin adoption.

The information on Fees and Pricing has also been updated, being the following something to read with consideration:

The fee we will charge you is our estimate of the fee the network will take to process your transfer. The fee that you will pay to us may be higher or lower than the actual fee paid to the network, based on market conditions. If the actual network fee is higher, that amount is PayPal’s or its Service Provider’s responsibility. If the actual network fee is lower, PayPal or its Service Provider will retain the difference.

We can bet that it will be lower (in the above context) almost every time …

That's for sure, especially considering the fact that majority of their users are probably not tech savvy enough to check what's the actual fee, and that PayPal is ripping them off.

[Leviathan.007]

So far, their press release is not mentioning there being fees on behalf of Paypal, and only refers to the necessary network fees:

-   No fees to receive crypto (bitcoin, Ethereum, Bitcoin Cash,  Litecoin) on your Paypal account, other than the network fee you pay when sending them over.

-   No additional fees to send from your Paypal account, other than the network fees (I figure the user won’t have much of a saying here, so there may be some implicit part of these fees kept by paypal if they overcharge and then send at a lower rate – my speculation).

-   No fees at all for sending crypto from one Paypal account to another.

As usual, we’d need to get hold of the detailed information in either the TOS or the Fees page to see if there is any fine print and/or limits/restrictions to bear in mind.

About 'no fees at all for sending crypto from one Paypal account to another.' when you are not actually transferring the bitcoin to another wallet and there is no network fee to pay for the transaction it's not really surprising to see them taking no fee for their internal transactions because it's not a big deal to see them doing this for the users.
But the most interesting part is the second one, about fees to send from your Paypal account here is where people should pay the transaction fee but they will not take any additional fees.

[jrrsparkles]

As the title says, PayPal is finally allowing their users to move their Bitcoin to their own wallets. PayPal went a long way, from getting people banned for buying Bitcoin using PayPal ( I know few people that lost their PayPal accounts due that) to now this. I am just curious how many PayPal users will actually go for that option and start taking responsibility for their own money. Somehow I doubt that number will be huge, bits its a good thing to have that option and is a step in the right direction.

Starting today, PayPal supports the native transfer of cryptocurrencies between PayPal and other wallets and exchanges," said the financial giant in a statement. The ability to conduct external transfers on PayPal's crypto platform, an image of which can be seen below, will start rolling out to users today and be available to everyone in the U.S. in the next week or two.

Am I really seeing this? Sure this will be a next big move towards adoption. If I am not wrong PayPal helped bitcoin from the previous bearish trend to recover and reach great heights now it will really let the users to withdraw bitcoin to the external wallet may kill the business of exchanges but surely bring a lot more new people into this.

[DdmrDdmr]

<…>

I wouldn’t think so really. Giving the chance to withdraw your crypto from Paypal is a feature that most novel crypto buyers on Paypal will likely not consider (sending to others perhaps more), and that probably benefits most those profiles of people that started off rather clueless, but have evolved to understand the value and virtues (and also the responsibility) of self-custody and crypto usage. When compared to the top Exchanges, Paypal looses by a thrashing currently, and is more like a very limited version at best.

Having said that, Paypal’s virtue is to make it simple for its vast user base to acquire some crypto (delimited geographically at it may currently be), and that is where its fortitude resides. Normally, the people who will use the service will be rather novel, and that is the core target I figure. An Exchange will have a certain base of similar customers, but also a segment of much more allegedly savy people, that use them for their trading with products that are more complex to follow through.

My doubt is whether Paypal will stop there in terms of functionality, or whether it will gradually evolve to incorporate lightweight products and features that we typically see in Exchanges. To be seen …

[SFR10]

I always wonder why people still prefer to use custododial ways to keep their cryptocurrencies in a way they can never have complete control of their coins.

It has something to do with being convenient ^{[for the most part (unfortunately, even some of the veteran users do it from time to time]}.

But what about the countries like El Salvador? Aren't the people of that country be allowed to buy,sell,transfer Bitcoins in paypal ?

As of this writing, these options aren't available for Salvadorans.
^{- It's worth mentioning that the same thing applies to Hawaii [a US state]!}

The fee we will charge you is our estimate of the fee the network will take to process your transfer. The fee that you will pay to us may be higher or lower than the actual fee paid to the network, based on market conditions. If the actual network fee is higher, that amount is PayPal’s or its Service Provider’s responsibility. If the actual network fee is lower, PayPal or its Service Provider will retain the difference.

We can bet that it will be lower (in the above context) almost every time …

Even if it's higher, PayPal users will still overpay for each of those transactions ^{[unfortunately]}... They'll estimate and charge a fee for 1 input and output Tx as if they're going to send it in that manner, but in reality, they're just going to batch/combine a lot of them into a single Tx and that leads to fewer expenses ^{[for them]} while they gain ridiculous amounts from processing those transactions.

[Fivestar4everMVP]

As the title says, PayPal is finally allowing their users to move their Bitcoin to their own wallets. PayPal went a long way, from getting people banned for buying Bitcoin using PayPal ( I know few people that lost their PayPal accounts due that) to now this.

Exactly the same story with Wikipedia, Wikipedia deleted their Bitcoin's page in 2010, and started accepting donations in Bitcoin in  2014 , what do we call this..? Irony of life   .

Anyways, paypal deciding to come out from the hole and start allowing thier users to send and receive crypto through their platform is a welcome development, though I highly doubt alot of people are going to use it, but it's still great they made the feature available for those who really need it.

-   No additional fees to send from your Paypal account, other than the network fees (I figure the user won’t have much of a saying here, so there may be some implicit part of these fees kept by paypal if they overcharge and then send at a lower rate – my speculation).

I totally agree with you, this is something that's very common with all centralized exchanges and custodial wallets.
As long as PayPal is going to be offering a custodial crypto wallet to their users, I am 100 percent certain they are going to be keeping parts of the fees they charge their customers for network transaction fee.

[jrrsparkles]

<…>

I wouldn’t think so really. Giving the chance to withdraw your crypto from Paypal is a feature that most novel crypto buyers on Paypal will likely not consider (sending to others perhaps more), and that probably benefits most those profiles of people that started off rather clueless, but have evolved to understand the value and virtues (and also the responsibility) of self-custody and crypto usage. When compared to the top Exchanges, Paypal looses by a thrashing currently, and is more like a very limited version at best.

Having said that, Paypal’s virtue is to make it simple for its vast user base to acquire some crypto (delimited geographically at it may currently be), and that is where its fortitude resides. Normally, the people who will use the service will be rather novel, and that is the core target I figure. An Exchange will have a certain base of similar customers, but also a segment of much more allegedly savy people, that use them for their trading with products that are more complex to follow through.

My doubt is whether Paypal will stop there in terms of functionality, or whether it will gradually evolve to incorporate lightweight products and features that we typically see in Exchanges. To be seen …

People who are already in the crypto may not even consider this but as mentioned PayPal has vast user base compared to the exchanges so people may try to buy bitcoin out of curiosity and also PayPal is not going to just let the people to get into cryptocurrencies without any business intention, probably we may see more changes which may eventually help the people to use cryptocurrency for buying. Once PayPal never accepted cryptocurrency later they let the people to buy it but didn't let them to withdraw maybe in future everything will change so this is a sign that cryptocurrency is here to stay.

[CaVO32]

As the title says, PayPal is finally allowing their users to move their Bitcoin to their own wallets. PayPal went a long way, from getting people banned for buying Bitcoin using PayPal ( I know few people that lost their PayPal accounts due that) to now this.

Exactly the same story with Wikipedia, Wikipedia deleted their Bitcoin's page in 2010, and started accepting donations in Bitcoin in  2014 , what do we call this..? Irony of life   .

Anyways, paypal deciding to come out from the hole and start allowing thier users to send and receive crypto through their platform is a welcome development, though I highly doubt alot of people are going to use it, but it's still great they made the feature available for those who really need it.

-   No additional fees to send from your Paypal account, other than the network fees (I figure the user won’t have much of a saying here, so there may be some implicit part of these fees kept by paypal if they overcharge and then send at a lower rate – my speculation).

I totally agree with you, this is something that's very common with all centralized exchanges and custodial wallets.
As long as PayPal is going to be offering a custodial crypto wallet to their users, I am 100 percent certain they are going to be keeping parts of the fees they charge their customers for network transaction fee.

It is like the same with the saying, if you can't beat them, join them. They have seen that the usage of crypto is fast multiplying, so they just swallowed their pride and accept the fact that bitcoin and crypto market will be a good addition to their services. They are now changing their approach as they have seen that crypto users won't use their platform if they can't withdraw their crypto out of their paypal wallets. Also, you won't buy from them if you are already a crypto user because you have better options. Like for example, I am a paypal user but won't buy crypto on their platform. I can directly buy it from exchanges which are offering better deals. It is good that they are changing their services for the benefit of its users.

[coupable]

It's possible that a Paypal wallet can be an option to move Bitcoin to a paypal wallet, and it seems that this will be the discussion and discussion about the issue of Fees, I myself don't know for sure about the Fees, maybe in the near future this Fee problem will be solved.

It's just like withdraw from an exchange or a bet casino. The deducted fee will contain the network fee for miners and a small portion for the service which is paypal in this case. Most of users think that this upgrade was about to facilitate things for users without asking why it wasn't set from the beginning. the simple answer is that paypal wasn't about do this until found that almost nobody use paypal to purchase or save crypto.

[DoublerHunter]

It's possible that a Paypal wallet can be an option to move Bitcoin to a paypal wallet, and it seems that this will be the discussion and discussion about the issue of Fees, I myself don't know for sure about the Fees, maybe in the near future this Fee problem will be solved.

It's just like withdraw from an exchange or a bet casino. The deducted fee will contain the network fee for miners and a small portion for the service which is paypal in this case. Most of users think that this upgrade was about to facilitate things for users without asking why it wasn't set from the beginning. the simple answer is that paypal wasn't about do this until found that almost nobody use paypal to purchase or save crypto.

^Probably from what I have understood, they realized that no one buys BTC from them because it cannot be withdrawn but now you can transfer it to the external wallet. It is good news for their users but as for me, I will never use this Paypal to purchase because it has heavy KYC procedures that will probably have you a problem in the future. But I will not blame Paypal for this, they are trying to be neutral from the government of course but whatever they do they cannot change that decentralized nature of BTC.

[pooya87]

So after almost 2 years (from October 2020) of letting people deposit bitcoin and trade it on their platform, they have accumulated enough bitcoin from their customers to feel safe to let people withdraw some of it (considering not everyone would withdraw)!

That will depend on their withdrawal fees, many exchanges use high fees to deter people from withdrawing, and many people don't even care about having their own wallet.

It is mostly about the fact that at all times there will be a large number of people with coins left in their custody, even with 0 withdrawal fee they won't cash out. In fact this is how many exchanges operate and if everyone were to withdraw they wouldn't be able to fulfill all requests. For example the scam exchange called Yobit has been operating like this.

[Rikafip]

Like for example, I am a paypal user but won't buy crypto on their platform. I can directly buy it from exchanges which are offering better deals. It is good that they are changing their services for the benefit of its users.

I haven't really bothered to check their rates as I stopped using PayPal 4-5 years ago after couple of my friends got their account banned due buying/selling crypto, but do other exchanges like Kraken or Coinbase offer better rates? I mean, what's the difference, percentage wise?

^Probably from what I have understood, they realized that no one buys BTC from them because it cannot be withdrawn but now you can transfer it to the external wallet.

I am not so sure that's the reason as I read somewhere that approximately 20% of the Paypal users in the United States bought/sold crypto. That number seems a bit too high, but even if its only 1/4 of that its still a big amount as PayPal has ~230 million users there. I think its more about PayPal realizing that majority of people won't withdraw bitcoin to their wallets, so why not offering that option for some good PR.

[PrivacyG]

TX Limits state that:

•   Weekly send limit: Crypto Assets totaling the equivalent of $10,000 USD
•   Minimum “send” transfer amounts:
o   BCH: 0.01 BCH
o   BTC: 0.001 BTC
o   ETH: 0.01 ETH
o   LTC: 0.01 LTC
We may change the above limits for safety, security or other lawful reasons. You can view your current limits by logging into your personal PayPal account.

Wait.  What?  So this new 'withdraw' feature lets you only withdraw up to 0.001 BTC per week or 0.004 BTC per month?  Am I reading this right?

If so, I have two questions.  Why would there be this limit?  I have two suspected answers.  They either do not have enough Bitcoin in their wallets to cover the total of their users wallets or they are using this together with the fee terms so that they can draw even more money out of their users pockets.

If you have a weekly limit of $30 at the current price and they retain the difference between their fee and the network fee in case the latter is smaller.  Then if you want to withdraw $100 from your PayPal you need to pay the fee 4 times with their limit.

Nuts!

-
Regards,
PrivacyG