PayPal Holdings Inc. announced later on Tuesday that it opted for allowing U.S. consumers to use their cryptocurrency holdings. Hence, it is allowing to pay at millions of its online merchants on a global scale. It is coming with a move that is going to significantly boost the use of all digital assets in everyday commerce.
Customers who are holding bitcoin, ether, bitcoin cash, and litecoin in PayPal digital wallets are now going to be able to convert their holdings into fiat currency. This is going to be available at the checkouts for making purchases.
PayPal came up with a revelation was that it was working on this service for the late last year. Now, it is going to be available to all of its 29M merchants in the upcoming months. According to the CEO, Dan Schulman, this is for the first time when you can seamlessly use cryptocurrencies in a similar way like that of a credit card or debit card in your PayPal wallet.
The checkout with crypto feature is developed on the ability for PayPal users to purchase, sell and hold cryptocurrencies, which San Jose, the California-based payments company, offered long back. This service offering made PayPal one of the largest mainstream financial companies that opened its new network to cryptocurrencies and helped to fuel a rally in the prices of virtual coins.
Bitcoin managed to get doubled with the value from the start of this year. It got a boost with increased interest from larger financial firms, which are betting with greater adoptions. Also, it is being seen as a hedge against inflation.
The launch of PayPal is now coming less than a week after Tesla Inc. said that it is going to start accepting bitcoin payments for its cars. Unlike PayPal transactions, Tesla is going to hold the bitcoin that is used as payment.
As the nascent asset is gaining traction within the mainstream investors, it is also yet to become a widespread form of payment, as it is in due part to volatility. PayPal is hoping that its service can change it by settling the transaction in fiat currency. Merchants are not going to take on the risk of volatility.
“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,” said Schulman.
The company is going to charge no transaction fee for checking out with crypto. However, only one type of coin can be used for each of the purchases.