PayPal is looking to launch the direct sales of cryptocurrencies to its hundreds of millions of users. This is according to three people familiar with the situation.
PayPal to Roll out Crypto Sales to Over 300 Million Users
One of the largest fintech companies, PayPal, is looking to roll out the direct sales of cryptocurrencies to its over 325 million users globally. At the moment, PayPal serves as an alternative way of withdrawing funds from crypto exchanges like Coinbase. However, this latest development will be the first time that the fintech giant will be offering the direct sales of cryptocurrencies.
A source close to the matter stated that he understands that PayPal is going to allow the buying and selling of cryptocurrencies directly. This could be made possible through PayPal and Venmo. The source added that the company would have a built-in wallet functionality that would make it easier to store the cryptos. At the moment, it is unclear how the cryptocurrencies will be made available to users. The industry source added that they expect PayPal to work with several crypto exchanges to source liquidity.
A second source confirmed that the fintech company is looking to offer both the buying and selling of cryptocurrencies, adding that the service could be rolled out over the next three months or sooner.
Despite the inside information from two sources, PayPal declined to comment on its cryptocurrency plans.
Laying the Foundations
The sources named Luxembourg-based Bitstamp and San Francisco-based crypto exchange Coinbase as the likely crypto exchanges to partner with PayPal. Also, Coinbase and Bitstamp declined to comment on the latest development.
Those following the crypto space know that PayPal and Coinbase have a longstanding relationship, with the pair working together as far back as 2016. In 2018, Coinbase launched its instant fiat withdrawals via PayPal for U.S customers. In 2019, Coinbase users in Europe were allowed to withdraw their earnings to their PayPal accounts. The feature was also rolled out for Canadian users last year.
Fintech companies offering cryptocurrency services are making money. Square, the payment platform launched by Jack Dorsey, launched Bitcoin purchases via its Cash App two years ago. In its recent earnings report, Cash App reported over $300 million in BTC revenue.
Revolut, the London-based fintech app, started offering cryptocurrencies to users in 2017 after its partnership with Bitstamp. The company raised $500 million in February, bringing its total valuation to $5.5 billion. Robinhood is another fintech app that has been offering cryptocurrency trading services since February 2018.
Cryptocurrencies have become an obvious way for fintech apps to increase their user base and to create new revenue streams. PayPal CEO Dan Schulman made it clear that he plans to aggressively monetize Venmo this year, with the app currently housing 52 million accounts.
PayPal Hiring for its New Blockchain Research Group
At the start of the year, PayPal posted job openings to boost its new Blockchain Research Group. The company posted eight engineering positions, with four of them in San Jose and the other four in Singapore.
PayPal is planning to expand its payment expertise after its brief participation with the Facebook-led Libra project last year, the sources added.
In an earlier interview this year, PayPal CTO, Sri Shivananda, mentioned that the company was focused on getting its own perspective and view on blockchain tech. They aim to see how the technology can help them to create an open digital payment platform that can be useful to everyone.
Shivananda stated that he could not comment on any specific plans of the company. He added that PayPal is a strong believer in the potential of blockchain technology. “The digitization of currency is only a matter of when not if,” he concluded.