On Monday payments giant PayPal launched new services allowing customers in the U.K. to buy, hold, and sell Bitcoin and other cryptocurrencies. The service will be available to personal accounts, not business accounts, that have verified their identity with the platform.
Jose Fernandez da Ponte, Vice President and General Manager of Blockchain, Crypto and Digital Currencies at PayPal commented, "The pandemic has accelerated digital change and innovation across all aspects of our lives — including the digitisation of money and greater consumer adoption of digital financial services."
This is the first expansion of PayPal’s bitcoin trading services outside of the U.S. The platform has simultaneously launched educational content about Bitcoin and other cryptocurrencies on the platform as well.
Jose continued, “Our global reach, digital payments expertise, and knowledge of consumer and businesses, combined with rigorous security and compliance controls provides us the unique opportunity, and the responsibility, to help people in the UK to explore cryptocurrency.."
The announcement comes after PayPal’s CEO Dan Schulman hinted during the company’s Q2 earnings call that Bitcoin buy and sell functionality was coming to Britain, a development that sees PayPal following through with promises it issued back in February. PayPal’s new crypto offerings were made possible through a partnership with Paxos Trust Company.
Customers can now buy, hold, and sell as little as £1 of Bitcoin on the platform via the website or the mobile app. The functionality of the app is still quite limited, as customers cannot send or receive Bitcoin. For Bitcoin users who see the app as a way to ease consumer onboarding, however, there is hope essential wallet features enabling withdrawals and deposits in Bitcoin might soon be forthcoming.
Without the ability to withdraw Bitcoin to another wallet, it is questionable whether PayPal has enabled access to Bitcoin at all. The feature is more akin to an I-owe-you for Bitcoin, a price exposure vehicle that popular exchanges such as Robinhood also offer.
Notably there are both transaction fees and currency exchange fees for buying and selling through the platform, a feature that other mobile payments service providers such as Square’s Cash App also have. Although Cash App has consistently made efforts to give Bitcoiners control of their withdrawal fees and enabled free off-chain transfers inhouse, they still collect large fees on purchases.
The leader in this space is Strike, which allows virtually feeless buying, selling, transferring and receiving of Bitcoin. Importantly, neither Cash App or Strike provide access to altcoins. PayPal’s provision of altcoin access shows it is choosing profit over understanding. It marks a nascent understanding of Bitcoin, but is an improvement nonetheless.