Prices jump: PayPal accepts cryptocurrencies like Bitcoin

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PayPal app logo: 346 million active accounts worldwide

Photo: THOMAS WHITE / REUTERS

The payment service PayPal opens up to the cryptocurrency market.

Starting this Wednesday, customers will be able to use PayPal's online wallets to trade Bitcoin and other virtual assets.

From the beginning of 2021 it will also be possible to pay with crypto currencies at the 26 million sales outlets in the PayPal network, the company announced.

The first license from the US state New York was obtained.

PayPal hope that the offer will promote the worldwide use of virtual currencies.

The network is also preparing for new digital currencies that are issued by central banks or companies, said CEO

(62) in an interview.

"We're working with central banks and thinking about all forms of digital currency and how PayPal can play a role," he said.

Holders of US accounts will be allowed to add Bitcoin, Ethereum, Bitcoin Cash or Litecoin to their wallets in the coming weeks, according to the statement.

The company plans to transfer the move to Venmo, the app for mobile payments, and selected other countries in the first half of 2021.

The news boosted cryptocurrency prices.

Bitcoin hit an annual high of $ 12,854 on Wednesday, up 8 percent.

The share of PayPal also gained around 3 percent on Wall Street.

Customers pay in Bitcoin, merchants get dollars

The strongly fluctuating exchange rates made Bitcoin and Co. relatively unusable as a means of payment, PayPal admitted.

Still, the company believes that digital currencies would prevail.

One sees clear advantages such as easier access for users who, for example, have no bank accounts, or direct transfers from states to citizens without going through banks and other intermediaries.

Other large fintech companies such as the mobile payment service Square or the stock exchange app Robinhood already let their customers trade in cryptocurrencies.

However, PayPal's launch into the market is remarkable because of its large reach.

The company from Santa Clara, California, has 346 million active accounts worldwide.

In the second quarter, PayPal processed payments of $ 222 billion.

Because of their fluctuating prices, cryptocurrencies are particularly interesting for speculators, but much less attractive for traders and buyers.

Transactions are generally much slower and more expensive than with established payment systems.

For purchases made in crypto currencies, PayPal wants to pay the merchants in state currencies such as US dollars or euros so that they do not have to deal with bitcoins.

Stablecoins that are firmly linked to established currencies could also be used as a means of payment.

Several central banks have announced plans to develop their own digital currencies, most recently the European Central Bank.

Last year, PayPal got out of the project launched by Facebook for the digital currency Libra.

The payment service provider justified this by wanting to concentrate on its own business.

With Libra, Facebook wants to build a global digital currency that will give users of the social network in regions without a functioning infrastructure access to the monetary system.

ak / reuters