Cryptocurrencies like Bitcoin could be poised to see more useful real-world applications after PayPal revealed more about its plans to launch a cryptocurrency-enabled digital wallet. Announced in October, the new wallet will allow users to buy, sell, and trade a variety of cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. In an earnings call with investors, the company confirmed that the service will first land for US-based customers in early 2021 before expanding to other territories and integrating into the Venmo app at the end of the second quarter. Laying out his vision for the future of PayPal, CEO Dan Schulman described the overhaul of the company's digital wallet as a "fundamental transformation" that will change the way users interact with the service.
PayPal cryptocurrency wallet
One of the main criticisms leveled at cryptocurrencies is that the actual use cases are extremely limited; Currently, crypto is more of an asset than a utility. However, the ambition behind PayPal's new digital wallet is to dramatically expand this set of use cases, giving more legitimacy to the cult technology that has so far failed to reshape the global ecosystem. payments significantly. “This solution will not involve additional integrations, volatility risk, or additional transaction fees for consumers or merchants, and will fundamentally improve the utility of cryptocurrency,” Schulman explained. "This is just the beginning of the opportunities we see as we work hand-in-hand with regulators to accept new forms of digital currencies." Importantly, the new system will have no effect on PayPal's 26 million merchants, who will always receive payment in fiat currency, regardless of whether the customer has paid in crypto or not. In addition to handling processing and settlement, PayPal will act as a currency converter, converting cryptocurrency to dollars (and other currencies) based on the daily rate. The main caveat though is that PayPal will charge relatively high fees for transactions that involve converting cryptocurrency to fiat and vice versa. The company will charge a 2,3% fee for transactions under €100, dropping to 1,5% for transactions valued at €1,000 or more. There will also be a gap between the price at which PayPal buys and sells cryptocurrency. The measures are allegedly designed to offset the risk taken by the company related to the volatility of cryptocurrencies. For example, if a user bought $XNUMX worth of bitcoin merchandise, but the value of the cryptocurrency dropped the next day, PayPal (as the middleman) would end up coming out of pocket regardless of the accident. Via TechCrunch