Today PayPal announced that it is the first entity to be approved for a conditional Bitlicense from the New York State Department of Financial Services (DFS). The license allows customers to buy, hold and sell cryptocurrencies.
As a result, PayPal is launching a new service to enable its 26 million worldwide merchants to accept digital assets as payment from Paypal’s 346 million users. Starting with the United States in the coming weeks, users can create a digital wallet and buy crypto. The merchant aspect will be enabled early next year. In the first half of 2021, it also plans to extend the service to Venmo and some international jurisdictions.
“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,” said PayPal CEO Dan Schulman.
Initially four cryptocurrencies will be available, including Bitcoin, Ethereum, Bitcoin Cash and Litecoin. PayPal also plans to provide educational material to consumers and is waiving fees to the end of the year.
New York licensed Paxos is providing cryptocurrency trading and custody services to PayPal. Paxos is also working on a DLT based equity settlement system being trialed by Société Générale, Credit Suisse and Instinet. Plus, it’s known for its US dollar stablecoins.
PayPal was initially a member of the Libra Association before dropping out. Three months ago, we revealed a letter from PayPal to the European Commission, which confirmed it had developed cryptocurrency capabilities.