PayPal will allow its customers to carry out transactions using Bitcoin and other cryptocurrencies by 2021. According to reports, the top financial services company will allow its customers to buy, sell, and spend cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).
The development was made possible through a partnership between PayPal and Paxos, which enabled it to secure a conditional cryptocurrency license from the New York Department of Financial Services.
PayPal accounts will be armed with cryptocurrency wallets for each of the cryptos listed to enable customers to receive crypto and use them for payments at shops and 26 million merchants in PayPal’s network. According to President and Chief Executive Officer of PayPal, Dan Schulman, this is intended to get these merchants used to cryptocurrencies ahead of Central Bank Digital Currencies (CBDCs).
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role.”Dan Schulman
Cryptocurrency fans say the development is not unexpected as cryptos are becoming widely accepted, and a financial services company like PayPal couldn’t be left out. Already, other major mainstream financial services companies in the U.S, such as Square Inc. have been allowing their customers to transact in cryptocurrencies. The company itself invested $50 million in Bitcoin recently, joining many other mainstream companies that have bought the digital asset, further increasing the optimism that cryptocurrencies have come to stay.
While crypto payments on PayPal will be made using cryptocurrency, the real settlements will be made using fiat currencies, such as the U.S Dollar, because merchants consider cryptos to be too volatile, and the exchange between the two is to be handled by PayPal.
How This May Affect Bitcoin’s Price
The news of PayPal’s support for cryptocurrencies has coincided with a sharp price surge of the asset in the last 24 hours. Bitcoin, which was trading below $11,500, suddenly started a move upward and broke the $12,000 on 22 October and currently stands at $12,932.98, according to market data aggregator CoinMarketCap.
As PayPal is one of the leading payment services providers globally, experts suppose that its support for Bitcoin could significantly boost the price in both the short and long term. Also, they have long anticipated that the price of Bitcoin will surge past $15,000 due to the halving that occurred in May. It is worth mentioning that with PayPal’s new support, which exposes its close to 350 million users to Bitcoin and other cryptocurrencies, this could make the price hit the $15,000 price level even faster.
At the moment, analysts believe that the top cryptocurrency is still in a bullish trend and could break through $14,000 easily pretty soon, which will then make $15,000 the next target. If this trend continues, the chances of Bitcoin hitting $17,000 this year may be significantly increased from what was initially predicted by top analyst and investment expert, Timothy Peterson.
Featured image: cryptonews.com