On Monday, payment giant PayPal launched new services that allow customers in the UK to buy, hold and sell Bitcoin and other cryptocurrencies. The service is available to private accounts, not business accounts, who have verified their identity with the platform.
Jose Fernandez da Ponte, Vice President and General Manager of Blockchain, Crypto and Digital Currencies at PayPal, commented: “The pandemic has accelerated digital transformation and innovation in all aspects of our lives – including the digitization of money and the greater adoption of digital financial services by consumers. ”
This is the first addition to PayPal’s bitcoin trading services outside of the US. At the same time, the platform has also published educational content about Bitcoin and other cryptocurrencies on the platform.
Jose continued, “Our global reach, digital payments expertise, and consumer and business knowledge, combined with rigorous security and compliance controls, give us a unique opportunity and responsibility to empower people in the UK to research cryptocurrencies to support.”
The announcement comes after PayPal CEO Dan Schulman hinted during the company’s Q2 earnings call that bitcoin buy and sell functionality would be coming to the UK, a development where PayPal is delivering on its February promises. PayPal’s new crypto offerings were made possible through a partnership with the Paxos Trust Company.
Customers can now buy, hold and sell Bitcoin on the platform through the website or mobile app for as little as £ 1. The functionality of the app is still quite limited, as customers cannot send or receive bitcoins. However, for Bitcoin users who see the app as a way to make consumer onboarding easier, there is hope that essential wallet features will soon be available that allow withdrawals and deposits in Bitcoin.
Without the option of withdrawing Bitcoin to another wallet, it is questionable whether PayPal even enabled access to Bitcoin. The function is more like an I-owe-you for Bitcoin, a price suspension tool that popular exchanges like Robinhood also offer.
In particular, there are both transaction fees and exchange rate fees for buying and selling via the platform, a function that other mobile payment service providers such as Square’s Cash app also have. Although Cash App has made consistent efforts to put bitcoiners in control of their withdrawal fees and allow internal free off-chain transfers, they still charge high fees for purchases.
The leader in this area is Strike, which enables virtually numb buying, selling, transferring and receiving of Bitcoin. It is important that neither the Cash App nor Strike offer access to Altcoins. PayPal’s provision of altcoin access shows that it chooses profit before understanding. It marks an emerging understanding of Bitcoin, but it’s an improvement nonetheless.