PayPal is finally allowing cryptocurrency holders to transfer their digital assets off its platform to other wallets and exchanges, the feature most often requested since the fintech giant’s crypto buy, sell and hold service went live in October 2020.
The move away from regimented custodial platforms towards more open systems is a trend being followed by other large fintech players to enter crypto, such as popular trading app Robinhood, which is rolling out a new crypto wallet focused on decentralized finance (DeFi) and non-fungible tokens (NFTs).
It was back at CoinDesk’s virtual Consensus event in 2021 that Jose Fernandez da Ponte, senior vice president, blockchain, crypto and digital currencies at PayPal, said plans to let users move their coins to third-party wallets were in the works.
“We are definitely responding to demand from users, that is one aspect,” said da Ponte in an interview this week. “We’ve also been very vocal from the beginning that we’re in this because we are a payments and commerce company, and we think that our role in the ecosystem is about increasing access.”
The ability to move bitcoin (BTC), ether (ETH), bitcoin cash (BCH) and litecoin (LTC) from PayPal’s crypto platform to external wallets is available from Tuesday to select U.S. users (not in Hawaii) and rolling out to all eligible U.S. customers in the coming weeks, according to a blog post.
When PayPal first announced its move into digital assets, it seemed to kick-start a bull run in the crypto markets. By allowing its customers to send and receive crypto, PayPal has become the world’s largest blockchain-enabled consumer digital wallet, according to Walter Hessert, head of strategy at Paxos, an infrastructure provider to PayPal.
In a statement, he said the platform was “a monumental step in the mainstream adoption of digital assets and Web3.”
PayPal down the rabbit hole
Asked about predictions for increased use of the platform in light of the new transfer functionality, “the early signs in terms of demand are very promising,” da Ponte said.
“I don’t know if it’s going to be about the absolute number of users, or it’s going to be more about folks continuing to move in the adoption cycle,” he said, adding: “We have a ton of people now who have adopted the basic product, and as they grow, they want to do more things. So, it’s less about bringing sophisticated users from the outside, it’s more continuing the learning curve for our base.”
Despite an ostensibly conservative approach to crypto, there’s much more going on behind the scenes at PayPal, which acquired tech-heavy cryptocurrency custody firm Curv back in March of last year, and early this year was revealed to have been exploring a U.S. dollar-backed “PayPal Coin.”
“We want people on our platform acquiring digital currencies to be able to then use them to do something, whether it’s buying NFTs or interacting with games or other things, and stablecoins are a component of that and really important for the commerce and payments aspect to grow,” da Ponte said.
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