PayPal customers will soon be able to buy and sell cryptocurrencies using their accounts. Along with Bitcoin, it will be possible to use PayPal to purchase Ethereum, Litecoin and Bitcoin Cash. These measures will be rolled out in the US next week, with a full roll-out expected early next year.
So how will this work? When you use Bitcoin (or any of the other cryptocurrencies) to pay someone, PayPal will convert it into the relevant national currency, meaning whoever you’re sending money to will receive the payment in, say, pounds or dollars, rather than BitCoin itself.
According to PayPal, the goal is "to increase consumer understanding and adoption of cryptocurrency. As part of this offering, PayPal will provide account holders with educational content to help them understand the cryptocurrency ecosystem.”
Some commentators have expressed scepticism about whether this will prove beneficial to the average PayPal user. David Gerard, author of Attack of the 50 Foot Blockchain and the upcoming Libra Shrugged: How Facebook Tried to Take Over the Money, wrote on his website that Paypal encouraging its users to buy and sell cryptocurrency is irresponsible:
“I’m baffled that PayPal would offer this… Ordinary people getting into crypto gambling will end up losing to the market manipulators. PayPal is feeding its users to the sharks.”
Bitcoin has historically had a somewhat murky reputation, as a currency that can be used for less-than-legal dark net dealings. But the fact it’s difficult to regulate does present some advantages: it can be a useful way of donating money to charitable or political causes when more conventional routes are blocked.
Some of the organisations involved in the ongoing “End SARS” movement in Nigeria, such as the Feminist Coalition, are only accepting donations via Bitcoin platform BTCPay, on the basis that it’s “secure, decentralized and censorship-resistant”. Paypal facilitating Bitcoin payments could make donations like this easier in the future.
All in all, this announcement could lead to some useful applications, but you’re probably not going to make your millions as a cryptocurrency trader any time soon.