One of the biggest stories in the cryptocurrency industry in 2021 is the announcement from PayPal that they would be enabling cryptocurrency-related transactions on their platform. PayPal is one of the biggest fintech platforms in the world, with over 330 million users and tens of millions of merchants. Its public acceptance and financial endorsements of cryptocurrency are unmistaken signs of just how far the crypto economy has come and also opened to a wider audience.
The PayPal news caused Bitcoin to once again rocket higher, imparting it the necessary momentum to push the cryptocurrency through resistance and to new all-time highs. Regardless of the bullish price action resulting from this recent news, however is not all positive for cryptocurrency users.
The way it works is that PayPal swaps any crypto assets out for fiat immediately before making the transaction. What’s really happening is that cryptocurrencies themselves aren’t being spent, but instead are being sold into cash and cash itself is being exchanged.
Rather relying on each cryptocurrency’s respective protocol to handle the transaction from wallet to wallet, PayPal has instead created a centralized system for payments. Companies like paypal have stopped short of fully embracing what the technology itself has to offer.
Regardless, however this announcement makes PayPal the largest private payments platform to allow for cryptocurrency transactions and is a major milestone for the crypto industry. This comes just after Tesla announced that it would be accepting bitcoin as payment for its products.
Bitcoin has particularly seen a triumphant few months following its bull run which began in 2020. After falling to around $3,000 at the beginning of the covid-19 pandemic in 2020, bitcoin has seen a new all-time price high of over $59k.
Despite all of this, there is still some concern about the volatility of bitcoin and other cryptos, though PayPal hopes to address this with the conversion to fiat currency.
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