Financial services firm PayPal has unveiled plans to launch a cryptocurrency hub designed to allow users to buy and sell virtual currencies from their PayPal account.
The company disclosed the move via an update to its terms and conditions, noting that the Hub will allow users to interact with digital assets held in their accounts in a variety of ways. Per the update, the Hub will facilitate transactions “where the proceeds from a sale of Crypto Assets will be used to pay for purchases through PayPal.”
According to the official disclosure, in addition to buying and selling digital assets, the Hub will facilitate the custody and the conversion of PYUSD to other digital currencies and allow users to “view market information and educational content.”
“Any balance in your Cryptocurrencies Hub represents your ownership of the amount of each Crypto Asset shown,” said PayPal. “You will not hold the digital Crypto Assets themselves in your Crypto Asset balance.”
The feature will be rolled out to selected Paypal users based on “a Balance Account” in good standing and upon verifying information such as a physical address, date of birth, and tax identification number.
“For some uses of your Cryptocurrency Hub, we may request that you provide a picture of your face or other biometric information for identity verification purposes,” read PayPal’s update.
However, the firm says that the service will remain unavailable to Hawaii residents until later.
Fresh off the launch of its dollar-backed stablecoin PayPal USD (PYUSD), it appears to be embracing virtual currencies. Experts have termed the latest move as a huge leap for Web 2.5 with the potential of seamlessly onboarding new users to explore distributed ledger technologies (DLT).
Splitting the ecosystem
PayPal’s stablecoin launch may have elicited waves of optimism among industry stakeholders, but critics are poking holes at the move. They argue that PYUSD’s smart contract contains “wipefrozenfunds” functionality contrary to the ethos of decentralization.
On the flip side, enthusiasts argue that PayPal’s stablecoin launch could open the floodgates for the mainstream adoption of digital assets. Besides increased adoption metrics, bulls are rubbing their hands for an “imminent” price rally similar to PayPal’s first foray into digital assets in early 2021.
Industry players cite PayPal’s 2021 integration of digital assets as the trigger for the last bull run that led to Bitcoin (BTC) reaching an all-time high of $68,789 before the end of the year.