I Am Quite Surprised
I must be honest, I did not envision this day coming, or at least not so soon! One of the reasons is that by not allowing direct withdrawals to non-custodial wallets, the platform and the government benefit. People earning “PayPal cash” are either forced to hold their Crypto assets on the platform or withdraw their cash and purchase the assets elsewhere. Furthermore, previously being unable to send Crypto outside of the PayPal infrastructure forced Crypto holders to initiate a tax event. If you cannot send it out then you have to sell it. Well, it appears that this has now changed. The following excerpt is taken from the PayPal Newsroom and was published on the 7th of June.
Allowing PayPal customers the flexibility to move their crypto assets (Bitcoin, Ethereum, Bitcoin Cash, or Litecoin) into, outside of, and within our PayPal platform reflects the continuing evolution of our best-in-class platform and enables customers to interact with the broader crypto ecosystem. Customers who transfer their crypto into PayPal can extend the utility of their crypto by spending using our Checkout with Crypto product at millions of merchants.
I am not too familiar with PayPal’s fee structure when it comes to Crypto. However, this is still good news, especially for those wishing to convert their PayPal earnings into Crypto.
Convenience & Adoption
PayPal has been the primary payment method for online workers and business owners for many years now. Etsy is a good example of how shop owners have utilized PayPal as a form of payment. There is an already established army of people earning “PayPal cash” and now they have full access to the Crypto economy. Being able to buy and hold Crypto on a platform is only half of the story. People want to be able to move it to a private wallet and utilize it for payments. I don’t think the original PayPal offering was attractive at all. As mentioned, creating a tax event every time you want to move your capital is highly unattractive. Furthermore, if you wanted to keep your Crypto, you had to sell it first. You then had to move the cash to a bank account, fund an exchange, buy the Crypto and later send it to your own wallet. This is not user-friendly at all and most likely deterred interested parties.
A Step In The Right Direction
The recent implementation from PayPal has now removed all of this unnecessary inconvenience and PayPal users are now able to enjoy a more comprehensive Crypto service. The only thing that could perhaps be an issue is the fee structure. I can’t comment on this as this upgraded service is only available to US users at this stage. That being said, at least US users can now receive Crypto in their wallet, as well as send it out to external wallet addresses. This is definitely what you want to be seeing when it comes to third-party Crypto services. PayPal users are now much more likely to purchase a bit of Crypto from time to time. Crypto enthusiasts are now also more likely to make use of platforms that offer PayPal services. These opportunities were previously avoided due to the fact that Crypto earnings could not be withdrawn to a private wallet.
All in all, I am quite impressed by this recent development. I really didn’t see this one coming! I think it could really add a lot of transaction activity on blockchains and serve to validate the importance of Crypto. The stronger the adoption becomes, the weaker the opposing voices become.