PayPal allows crypto transfers to external wallets
The U.S. payment operator PayPal has some news to share – the company finally decided to respond to its users’ demand by allowing them to transfer cryptocurrencies, including to external wallets.
Two years after the fintech behemoth expanded its activities to accepting digital currencies, the customers are now having the choice to self-custody of their digital assets.
The new add-on is now available only to select U.S. clients but will be expanded out to all eligible U.S. customers in the next few months. Back in October 2020, the company decided to allow cryptocurrency trading for Bitcoin, Ethereum, Litecoin and Bitcoin Cash. However, users couldn’t move their assets off the platform without transferring it to fiat first.
Jose Fernandez da Ponte, Senior Vice President and General Manager said that the new attribute was the one users have been asking for the most.
Now, when a client has crypto stashed somewhere else and needs to secure it, they’ll be able to convey it to PayPal from an exterior address. “They (users) will additionally ship crypto to anybody who’s within the PayPal system,” said Fernandez da Ponte. He also confirmed the company has been assigned a BitLicense, a New York term for all crypto-related businesses.
Fernandez da Ponte added that the main reason the company entered the crypto space was because of its belief that a sizeable part of trade is going to move to cryptocurrencies. Trade in terms of buying or selling tangible and intangible products or services with cryptocurrency. The focus on trade, rather than making itself an exchange, allows PayPal to function without fees related with cryptocurrency transactions by letting its users’ using tools like ‘Checkout With Crypto’.
Paypal news bringing the stock up
It's still not known how much digital assets are adding to PayPal's bottom line, especially since the company didn’t reveal the exact numbers of how many people are using its Bitcoin or Ethereum service.
It is to believe though, if compared with much bigger crypto businesses such as the Coinbase or Robinhood, that the volume of cryptocurrency transactions plunged substantially along with the recent market downturn. Paypal also recorded a fall in its quarterly results. The company’s first-quarter revenue for 2022 stood at $6.48 billion. Even though this represents a year-over-year increase of 8%, Paypal lost 32% in operating income, dropping to $711 million.
The company reported a net income of $509 million with $0.43 earnings per share, which is down 53%. Earnings per share decreased by 28% on an adjusted basis to $0.88. That is why it’s even more likable that the company hasn’t been backing off its ambitious crypto plans. Fernandez da Ponte said he's being calm.
"There’s a lot of discussion about crypto winter, but it’s important to see beyond that," he commented. "The macro trend (of broad cryptocurrency adoption) is undisturbed."
After the news went global, shares of the company were up by 2.05% at $88.59.
There seems to be allot of positive momentum with Fintech payment services adopting crypto with Mastercard going on a crypto hiring spree to ramp up its efforts in the space. This can only bode well for the industry which is becoming increasingly integrated with the traditional financial ecosystem.
Author: Teuta Franjkovic
A sincere writer with a strong will to share knowledge on all things blockchain, crypto, metaverse and DeFi. Starting out as a writer with Cosmopolitan, Teuta has risen through the ranks of business journalism, editing newspapers and websites within the fintech industry for over 15 years. She holds a double MA in Public Politics and Entrepreneurship.