PayPal Goes Active on Crypto Space, Slew of News

Summary

  • PayPal has been under the spotlight of late due to two reasons, the launch of new services to buy, sell and hold cryptocurrency, and the termination of its 11-year long relationship with Epik.
  • With the new services, the PayPal account holders could buy, hold, and sell select cryptocurrencies from their PayPal Wallet.
  • The end of the partnership between Epik and PayPal was related to Epik’s Masterbucks.

PayPal Introduces New Service Enabling Users to Transact Cryptocurrency:

On 21 October 2020, PayPal announced the release of a new service that would allow the users to buy, hold & sell cryptocurrency straight from the PayPal account. The Company also highlighted its plan to raise cryptocurrency's utility significantly by making it accessible as a funding source for purchasing at its 26 million merchants.

To improve consumer’s understanding of cryptocurrency adoption, PayPal stated that it unveiled the ability to buy, hold and sell specific cryptocurrencies directly from the PayPal digital wallet. The cryptocurrencies would initially feature Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. The service would soon be available to PayPal accountholders in the US.

Further, the Company plans to expand the features to Venmo and select international markets during 1H 2021. The service is enabled in the US via its partnership with Paxos Trust Company. 

Paxos Trust Company provides regulated cryptocurrency products and services.

Educational Guidance Related to Cryptocurrency Ecosystem to PayPal Accountholders:

As part of the offerings mentioned above, PayPal would provide educational content to the accountholders for better understanding of the cryptocurrency ecosystem, the associated risks, prospects concerning cryptocurrency investing, and information around blockchain technology.

New York State Department of Financial Services Grants PayPal BitLicense:

The New York State Department of Financial Services had recently granted a conditional BitLicense to PayPal. The approval came after the June 2020 announcement made by the Company for a new framework for a conditional BitLicense to inspire and support interested institutions to have a well-regulated method to use the New York virtual currency marketplace.

Relationship between PayPal and Epik terminated

The companies recently announced the termination of their partnership due to the financial risk issues and problems related to Epik’s digital coin services.

In an open letter provided by Epik to the executives of PayPal concerning actions to deplatform conservative voices, PayPal said the reason to end the support was service risk.

Founded in 2009, Epik has earned an industry reputation for providing excellent service and support. It is the leading provider of integrated domain name lifecycle management solutions.

As per Epik, the relationship between the two parties ended after 11 years of continuous service with no considerable history of chargebacks or any admin issues. However, PayPal ended the collaboration without any discussion and reason.

There is a buzz in the market that the end of the relationship between the two parties was related to Epik’s digital currency, Masterbucks. The currency can easily be used to purchase products sold by Epik or get converted to US dollars.

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