PayPal announced today that its users will be able to transfer cryptocurrencies from their accounts to other wallets and exchanges in response to client demand.
“This was the most requested feature from our users since we started selling crypto purchases on our platform,” said Jose Fernandez da Ponte, SVP and general manager of blockchain, crypto, and digital currencies at PayPal.
PayPal clients will be able to transfer supported coins into PayPal, move crypto from its app to external crypto addresses such as exchanges and hardware wallets, and send crypto to other PayPal users “in seconds” with the new capability.
How it will work
Customers are responsible for network fees when making external transfers, which vary based on the blockchain and the crypto asset. Internal transfers – PayPal to PayPal — are free of charge.
“If customers hold cryptocurrency elsewhere and wish to consolidate it, they can move it to PayPal from external addresses,” Fernandez da Ponte says. “They can also transmit cryptocurrency to anyone in the PayPal system.”
Acceptance of cryptocurrencies by PayPal
PayPal gave its users access to purchase, sell, and hold cryptocurrency in October 2020. Then, in late March 2021, PayPal announced the debut of Checkout with Crypto, a tool that allowed consumers to use cryptocurrencies to check out at millions of online companies.
This piece expanded on PayPal’s current cryptocurrency initiatives, which include its relationship with Paxos to enable its service that allows clients to buy, sell, and store a variety of cryptocurrencies, as well as its acquisition of bitcoin security startup Curv. Fernandez da Ponte acknowledged at Consensus last year that allowing its consumers the chance to transfer would be the next step.
“This is a natural conversion for our users who want to do more with their digital assets,” Fernandez da Ponte told TechCrunch this week. “We see ourselves as a conduit between the fiat, or traditional finance, environment and the web3 environment. We are enabling connectivity to other wallets, exchanges and applications.”
Giving its customers the ability to move their crypto assets — such as bitcoin, ethereum, bitcoin cash, or litecoin — into, outside of, and within PayPal is a move that the company could not avoid if it wanted to keep up with continued crypto adoption and avoid being perceived as being behind the times in a rapidly changing fintech landscape.
Despite recent volatility in the crypto industry, Fernandez da Ponte stated that PayPal continues on this path “because consumers are [still] adopting cryptocurrencies.”
Related article: PayPal’s UK Customers to Buy Ethereum and Other Cryptocurrency Soon
“This move shows we’re in this for the long term,” Fernandez da Ponte added. “I think it’s important to stay the course and continue to invest in the space.”
However, this new functionality is only available to customers in the United States. PayPal claims it has created an additional identity verification step for users before they can transfer any cryptocurrency for security concerns. The rollout will be incremental, with select US users allowed to do so starting today and additional “qualified” US customers — those who complete the identification verification process — able to do so in the following weeks.