PayPal adds crypto transfers to its offering
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PayPal ramps up its crypto offering by allowing customers to transfer cryptocurrencies to external wallets.
The payments giant PayPal has had a vested interest in cryptocurrencies since October 2020, when it first announced it would allow its customers to buy or sell cryptocurrencies. But one of the major criticisms of its offering was that you couldn’t move digital assets off-platform.
However, on Tuesday, PayPal announced that users can now move crypto from its platform to external crypto addresses, including exchanges and hardware wallets. The functionality will be rolled out to all eligible US customers in the coming weeks, with only a select number of US users able to use it at the time of writing.
The move indicates that despite the downturn in the crypto market, PayPal is committed to the long game regarding digital assets and customers using those assets.
PayPal’s crypto focus
This week, PayPal became the first company to convert its conditional New York Department of Financial Services (NYDFS) Bitlicense into a full one. This move has allowed PayPal to expand the accessibility of digital currencies on its platform through the introduction of crypto transfers.
As a mainstream payments app, adding cryptocurrencies to its services was a big step toward mass adoption of crypto in the wider market. While initially users could only hold or sell their crypto via the platform, PayPal has been regularly expanding its services. These services include the option to pay with crypto at checkout and the ability to transfer assets off its platform to other wallets and exchanges.
Jose Fernandez de Ponte, senior vice president and general manager for PayPal’s blockchain, crypto and digital currencies business, has also said that PayPal will continue to roll out additional crypto features, products and services in the months ahead.
The payments company has recently shifted its focus from adding new users to encouraging more use of its app. It previously said that customers open their wallets twice as often after they sign up for crypto offerings, further indicating that it believes that crypto is the key to encouraging user engagement.
What are the implications of PayPal’s move?
The size and scale of PayPal mean that any move it makes in the crypto space will likely have an impact. When it first announced its move into crypto, it became one of the world’s largest blockchain-enabled consumer digital wallets.
Expanding its offering to include crypto transfers will further cement its place in the Web3 space. Whether it will compete with exchanges currently favored by crypto enthusiasts, we are yet to see.
Following the announcement, its share price climbed, finishing the day 4% higher at $88.58. However, the uplift was short-lived, as shares closed Thursday at $84.11.
PayPal’s share price has taken a battering in recent months, down 56% year to date. The payments giant saw a boost as a result of the pandemic, driven by a surge in online shopping. But its recent performance has investor confidence wavering.
Expanding its crypto offerings and committing to the Web3 market may prove to be the way forward for the payments company. Despite the recent crisis in the crypto market, PayPal appears to be committed to a future involving digital assets.
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