SAN JOSE, Calif., Oct. 21, 2020 /PRNewswire/ -- The migration
toward digital payments and digital representations of value
continues to accelerate, driven by the COVID-19 pandemic and the
increased interest in digital currencies from central banks and
consumers. PayPal Holdings, Inc. (NASDAQ: PYPL) today announced the
launch of a new service enabling its customers to buy, hold and
sell cryptocurrency directly from their PayPal account, and
signaled its plans to significantly increase cryptocurrency's
utility by making it available as a funding source for purchases at
its 26 million merchants worldwide.
Mainstream adoption of cryptocurrencies has traditionally been
hindered by their limited utility as an instrument of exchange due
to volatility, cost and speed to transact. However, the promise of
advanced technological platforms offers the possibility of
mainstreaming digital currencies. According to a survey by the Bank
for International Settlements, one in 10 central banks –
representing approximately one-fifth of the world's population –
expect to issue their own digital currencies within the next three
years.
"The shift to digital forms of currencies is inevitable,
bringing with it clear advantages in terms of financial inclusion
and access; efficiency, speed and resilience of the payments
system; and the ability for governments to disburse funds to
citizens quickly," said Dan
Schulman, president and CEO, PayPal. "Our global reach,
digital payments expertise, two-sided network, and rigorous
security and compliance controls provide us with the opportunity,
and the responsibility, to help facilitate the understanding,
redemption and interoperability of these new instruments of
exchange. We are eager to work with central banks and
regulators around the world to offer our
support, and to meaningfully contribute to shaping the
role that digital currencies will play in the future of global
finance and commerce."
Building Understanding and Adoption of Cryptocurrency
To increase consumer understanding and adoption of
cryptocurrency, the company is introducing the ability to buy, hold
and sell select cryptocurrencies, initially featuring Bitcoin,
Ethereum, Bitcoin Cash and Litecoin, directly within the PayPal
digital wallet. The service will be available to PayPal
accountholders in the U.S. in the coming weeks. The company plans
to expand the features to Venmo and select international markets in
the first half of 2021. The service is enabled in the U.S. through
a partnership with Paxos Trust Company, a regulated
provider of cryptocurrency products and services.
PayPal has also been granted a first-of-its-kind
conditional Bitlicense by the New York State Department of Financial
Services (NYDFS).
"NYDFS' approval today follows our June
2020 announcement for a new framework for a conditional
Bitlicense to encourage, promote, and assist interested
institutions to have a well-regulated way to access the
New York virtual currency
marketplace in a way that is both timely and protective of
New York consumers, through
partnerships with New York
authorized virtual currency firms," said Linda A. Lacewell, superintendent, NYDFS. "NYDFS
will continue to encourage and support financial service providers
to operate, grow, remain and expand in New York and work with innovators to enable
them to germinate and test their ideas, for a dynamic and forward
looking financial services sector, especially as we work to build
New York back better in the midst
of this pandemic."
As part of this offering, PayPal will
provide accountholders with educational content to help
them understand the cryptocurrency ecosystem, the risks and
opportunities related to investing in
cryptocurrency, and information on blockchain technology.
There are no service fees when
buying or selling cryptocurrency through
December 31, 2020, and there are
no fees for holding cryptocurrency in a PayPal account.
Increasing the Utility of Cryptocurrency in Digital
Commerce
Beginning in early 2021, PayPal customers will be able to use
their cryptocurrency holdings as a funding source to pay at
PayPal's 26 million merchants around the globe. Consumers will be
able to instantly convert their selected cryptocurrency balance to
fiat currency, with certainty of value and no incremental fees.
PayPal merchants will have no additional integrations or fees, as
all transactions will be settled with fiat currency at their
current PayPal rates. In effect, cryptocurrency simply becomes
another funding source inside the PayPal digital wallet, adding
enhanced utility to cryptocurrency holders, while addressing
previous concerns surrounding volatility, cost and speed of
cryptocurrency-based transactions.
Exploring and Investing in the Next Generation of Financial
Services Infrastructure
In addition to providing these significant cryptocurrency
services, PayPal has been exploring the potential of digital
currencies through partnerships with licensed and regulated
cryptocurrency platforms and with central banks around the
world. For the past five years, PayPal has increased its focus and
resources on exploring the next generation of digital financial
services infrastructure and enhancements to digital commerce
through an internal blockchain-focused research team. In
2019, PayPal Ventures, the company's venture capital arm,
invested in TRM Labs, a company focused on helping financial
institutions prevent cryptocurrency fraud and financial crime, and
Cambridge Blockchain, a blockchain-based identity management and
compliance software company. PayPal will continue exploring the
potential of distributed ledger technologies to improve financial
services and assure they are faster, more secure and less
expensive. The company intends to work hand-in-hand with
regulators, governments and central banks in this quest.
To learn more and join the waitlist for PayPal's cryptocurrency
services, click here.
About PayPal
PayPal has remained at the forefront of
the digital payment revolution for more than 20 years. By
leveraging technology to make financial services and commerce more
convenient, affordable, and secure, the PayPal platform is
empowering more than 300 million consumers and merchants in more
than 200 markets to join and thrive in the global economy. For more
information, visit paypal.com.
Forward-Looking Statements
This announcement contains
"forward-looking" statements within the meaning of applicable
securities laws. Forward-looking statements and information relate
to future events and future performance and reflect, among other
things, PayPal's plans with respect to its cryptocurrency
initiatives. Forward looking statements may be identified by words
such as "seek", "believe", "plan", "estimate", "anticipate",
"expect", "project", "forecast", or intend", and statements that an
event or result "may"" "will", "should", "could", or "might" occur
or be achieved and any other similar expressions.
Forward-looking statements involve risks and uncertainties which
may cause actual results to differ materially from the statements
made. More information about these and other factors can be found
in PayPal Holdings, Inc.'s most recent Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and
other filings with the Securities and Exchange Commission (the
"SEC"), and its future filings with the SEC.
The forward-looking statements contained in this announcement
speak only as of the date hereof. PayPal expressly disclaims
any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statement is based.
Media Contacts
Aaron
Gould
akgould@paypal.com
Josh Criscoe
jcriscoe@paypal.com
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SOURCE PayPal Holdings, Inc.