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- PayPal users in the United States will be able to use Bitcoin to pay merchants by converting the cryptocurrency into fiat.
- Consumers will only be able to convert one cryptocurrency per purchase and will not have to pay any fees.
Payments processor PayPal has announced the expansion of its crypto services, per a Reuters report. From now on, U.S. users of the platform will be able to tap their funds in Bitcoin, Ethereum, Litecoin, and Bitcoin Cash to pay millions of merchants around the world.
Launched on October 21, 2020, PayPal’s crypto service marked a milestone in adoption. Until today’s announcement consumers were only able to buy or sell the cryptocurrencies offered. The company plans to expand its services to its more than 300 million users in the coming months. Dan Schulman, CEO of PayPal, stated the following:
This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet.
Schulman expects that this service can make BTC and cryptocurrencies a more widely accepted payment method worldwide. By settling transactions in the fiat currencies offered by the platform, traders won’t have to worry about fluctuations in prices:
We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants
Moreover, users will only be able to convert funds into a specific cryptocurrency per purchase and will not have to pay transaction fees. Remarkably, this news comes just days after Tesla announced that it will begin accepting BTC as a payment method for its products and a day after Visa said it will begin settling transactions over Ethereum’s blockchain.
Impact on Bitcoin’s price
Bitcoin’s price has reacted positively to the news and is trading at $58,779, at the time of publication, with gains of 1.17% in the last 24 hours. On the weekly and monthly charts, gains stand at 8.11% and 25.99% respectively.
The Bitlicense, which PayPal acquired from the State of New York, requires it to maintain a 1-to-1 parity for each BTC purchased by its users. Therefore, rising demand for the cryptocurrency on the platform is bound to increase its buying pressure and impact the price.