PayPal will announce today that it has enabled US consumers to use their cryptocurrency holdings to pay at millions of its online merchants worldwide. This could significantly promote the use of digital assets in daily trading.
Customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets can now convert their holdings to fiat currencies at the checkouts to make purchases.
The service, which PayPal was working on late last year, will be available at all 29 million merchants in the coming months, the company said.
“This is the first time that you can seamlessly use cryptocurrencies like a credit card or debit card in your PayPal wallet,” President and CEO Dan Schulman told Reuters before an official announcement.
Checkout with Crypto builds on PayPal users’ ability to buy, sell, and hold cryptocurrencies that the San Jose, California-based payment company launched in October.
The offer made PayPal one of the largest incumbent financial firms to open its network to cryptocurrencies and helped boost prices for virtual coins.
Bitcoin’s value has nearly doubled since the beginning of this year, compounded by increased interest from larger financial firms looking to gain acceptance and view this as a hedge against inflation.
PayPal launched less than a week after Tesla announced it would accept Bitcoin payments for its cars. In contrast to PayPal transactions, where merchants receive fiat currencies, according to Tesla, the bitcoin used as a means of payment is stored.
Although the emerging asset is gaining traction among mainstream investors, it has yet to become a widely used payment method, in part because of its persistent volatility.
PayPal hopes their service can change that as merchants don’t take on the volatility risk by processing the transaction in fiat currency.
“We believe this will be a transition point where cryptocurrencies will move from being an asset class primarily bought, held, and / or sold by you to a legitimate source of funding for real-world transactions with millions of merchants,” Schulman said.
The company doesn’t charge a transaction fee for checking out using crypto and only one type of coin can be used on each purchase, it said.