PayPal users soon will be able to use cryptocurrency to pay for merchandise at millions of retailers, a move that could further push digital currencies into the mainstream.
The announcement comes a day after Visa (ticker: V) said it would process crypto payments. Tesla (TSLA) recently began accepting payments in crypto for their merchandise, while Mastercard (MA) said last month it would facilitate crypto transactions beginning this year.
PayPal (PYPL) already allows customers to buy and sell Bitcoin and other digital assets such as Bitcoin Cash, Ethereum, and Litecoin. Customers who have these cryptocurrencies will be able to convert them into real-world currencies to pay for items at the checkout register at 29 million merchants. The program rolls out over the next few months.
There is no transaction fee and customers can use only one type of cryptocurrency for each purchase.
“Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies,” Dan Schulman, PayPal’s CEO, said in a statement.
Bitcoin and other cryptocurrencies have surged in prominence after spending years in the shadows, gaining more widespread acceptance with the help of some prominent investors and companies.
Shares of PayPal are up 0.5% so far this year but was roughly flat on Tuesday. The S&P 500 is up 5% year-to-date.
Bitcoin has been volatile, rising 1.4% on Tuesday to $58,918, which is down from earlier this month when it surged past $60,000. But last year around now, it was trading at just around $6,500. The market value of Bitcoin outstanding is $1.1 trillion, according to Coindesk.
The meteoric rise from last year is boosting seemingly everything Bitcoin touches. Coindesk, a crypto exchange, is planning a public listing, as is its smaller rival Kraken. Fidelity Investments is seeking approval for a Bitcoin ETF.
There has also been plenty of skepticism. Federal Reserve Chairman Jerome Powell this month called it a “speculative asset” that is more a substitute for gold rather than the dollar. “They are highly volatile,” he said of cryptoscurrencies, “and therefore not really useful as a store of value.”
That isn’t stopping the growing number of Bitcoin enthusiasts, however. A survey by Mizuho Securities earlier this month found that about 10% of $380 billion in federal stimulus checks to individuals was headed for investments in Bitcoin or stock.
“Bitcoin is the preferred investment choice among check recipients,” the bank said in a report. “It comprises nearly 60% of the incremental spend, which may imply $25 billion.”
Until recently, crypto owners didn’t have a lot of options for using their digital assets for transactions. Now Tesla is taking Bitcoin—but keeping it as such, not converting it to dollars or other currency. Visa ’s plans aim to allow transactions using Bitcoin and other cryptos at its 70 million merchants, the company said on its recent earnings call.
PayPal allowed customers to buy and sell cryptos beginning last October and set up a dedicated crypto business last month.
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