The American online payment giant PayPal will reportedly offer its US consumers the option to use cryptocurrency in their digital wallets to pay for online purchases made from merchants globally, a move that could significantly boost the use of crypto assets in everyday commerce.
According to the company’s statement, customers who hold bitcoin, ether, bitcoin cash and litecoin in the digital wallet of PayPal will now be able to convert their holdings into fiat currencies at checkouts to make purchases. The service will be available at all of its 29 million merchants in the coming months.
“This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet,” President and CEO of PayPal, Dan Schulman stated ahead of a formal announcement.
Checkout with Crypto gives the PayPal users the ability to buy, sell and hold cryptocurrencies, which the US-based payments company launched in October. The offering made PayPal one of the largest mainstream financial companies to open its network to digital assets and helped fuel a rally in virtual coin prices.
Since the start of this year, bitcoin has nearly doubled in value spurred by the emerging interest from larger financial firms that are betting on greater adoption and see it as a hedge against inflation.
PayPal’s announcement comes in less than a week after Tesla said it would start accepting bitcoin payments for its cars. Unlike PayPal transactions where merchants will be receiving fiat currency, Tesla said it will hold the bitcoin used as payment.
Even though the digital asset is gaining traction among mainstream investors, it has not been a widespread form of payment due to its continued volatility. PayPal hopes that its service can change this situation, as by settling the transaction in fiat currency, merchants will not have to confront the volatility risk.
“We think it is a transitional point where cryptocurrencies move from being predominantly an asset class that you buy, hold and or sell to now becoming a legitimate funding source to make transactions in the real world at millions of merchants,” Mr. Schulman said.
The company will charge no transaction fee to checkout with crypto and only one type of coin can be used for each purchase, the company added.