Payments giant PayPal has chosen Paxos to handle digital assets for the upcoming (yet unconfirmed) crypto offering, CoinDesk reported Monday.
PayPal the Biggest Financial Firm to Onboard Crypto?
Coindesk said “two people familiar with the matter” told the publication that PayPal users will soon have access to crypto services; including trading and storage. The announcement will be formally announced this week, sources noted.
Just last week, Paxos announced its Crypto Brokerage and listed Revolut UK – the retail trading application boasting millions of daily users – as its first client. Revolut is based in the U.S. and was one of the first mainstream financial/fintech firms to onboard Bitcoin trading for clients.
The development stands to make PayPal one of the biggest crypto-friendly firms if the reports are true. The 1998-founded company operates a worldwide online payment system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders.
As of 2020, PayPal operates in 202 markets and has 305 million active, registered accounts. PayPal allows customers to send, receive, and hold funds in 25 currencies worldwide.
PayPal will join Square and unicorn trading app Robinhood as commercially successful financial services companies to provide crypto-trading services.
At press time, it remains unclear which cryptocurrencies PayPal will offer. However, considering the regulatory certainty and acceptance for Bitcoin and Ethereum, the two can be earmarked as top contenders.
PayPal did not return requests for comment by press time. Paxos did not respond to CoinDesk’s emails about comments on the development.
Challenger Firms Accepting Crypto
With the development; cryptocurrencies are entering a new era of acceptance across financial markets. Much of this adoption is led by “challenger” banks and digital fintech firms geared to a predominantly younger audience – the latter ripe for crypto adoption.
CoinDesk noted the new Paxos brokerage is “an API-based solution for making crypto services easy for businesses to roll out, allows cryptocurrency buying, selling, holding and sending capabilities – while handling all regulatory compliance aspects.”
Paxos is legally permitted to hold gold and cryptocurrencies like bitcoin (BTC) and ether (ETH) for accredited investors, as BTCManager reported last year.
Meanwhile, Coinbase – which has a longstanding relationship with PayPal – is currently absent from reports of the PayPal crypto offering. It is one of the few crypto companies that enjoy payment services from the latter – taking on a lot of regulatory and legal compliances to do so.