On October 21, 2020, PayPal Holdings, Inc. (“PayPal”) announced the launch of a new service enabling its customers to buy, hold and sell cryptocurrency directly within their PayPal account. This service will first be available to PayPal accountholders in the U.S. in the coming weeks, with plans to expand the service to select international markets in 2021.
Why should I care?
It’s a signal of PayPal’s plans to significantly increase cryptocurrency’s utility. There are approximately 345 million PayPal accounts worldwide, and this new service is planned to make cryptocurrency available as a funding source for purchases at its 26 million merchants worldwide. Initially the service will feature Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
The shift to digital currencies is inevitable. Cryptocurrency’s volatility, cost and speed to transact have historically hindered their mainstream adoption; however, the advancement of technology is expediting widespread adoption of digital currencies. Advantages of digital forms of currencies include efficiency and speed of payments, and financial inclusion and access.
PayPal has been exploring the potential of digital currencies through partnerships with licensed and regulated cryptocurrency platforms and with central banks around the world. A survey by the Bank of International Settlements found that one in 10 central banks (representing approximately 20% of the world’s population) expect to issue their own digital currencies within the next three years.
Bishop & McKenzie LLP will keep you updated on the development of digital currency regulation in Canada. Please reach out if you have any questions to ensure you get the support your organization needs.