PayPal finally allows cryptocurrency holders to transfer their digital assets from its platform to other wallets and exchanges. This feature has been requested frequently since the fintech giant’s crypto buy, sell, and hold service launched in October 2020.
Other prominent fintech players entering crypto are following the trend away from regimented custodial platforms and toward more open systems, such as the popular trading app Robinhood, which is rolling out a new crypto wallet focused on decentralized finance (DeFi) and non-fungible tokens.
Back in 2021, at CoinDesk’s virtual Consensus event, PayPal’s senior vice president of blockchain, crypto, and digital currencies, Jose Fernandez da Ponte, stated that plans to allow users to move their coins to third-party wallets were in the works.
“We are responding to user demand. That is one aspect,” da Ponte said in an interview this week.
“We’ve also been clear from the start that we’re in this because we’re a payments and commerce company, and we believe that our role in the ecosystem is to increase access.”
According to a blog post, the ability to move bitcoin (BTC), ether (ETH), bitcoin cash (BCH), and litecoin (LTC) from PayPal’s crypto platform to external wallets is available to select US users (not in Hawaii) starting Tuesday. It will be available to all eligible US customers in the coming weeks.
When PayPal first announced its move into digital assets, it appeared to spark a bull run in the cryptocurrency markets. But, according to Walter Hessert, head of the strategy at Paxos, a PayPal infrastructure provider, by allowing its customers to send and receive cryptocurrency, PayPal has become the world’s largest blockchain-enabled consumer digital wallet.
He called the platform “a monumental step in the mainstream adoption of digital assets and Web3” in a statement.
PayPal opens the way for users to acquire crypto
When asked about predictions for increased platform use in light of the new transfer functionality, da Ponte said, “the early signs in demand are auspicious.”
“I’m not sure if it’ll be about the absolute number of users or more about people moving through the adoption cycle,” he said, adding, “We have a ton of people now who have adopted the basic product, and as they grow, they want to do more things.” So it’s less about bringing in sophisticated users from outside and more about continuing the learning curve for our existing users.”
Despite an ostensibly conservative approach to cryptocurrency, there’s a lot more behind the scenes at PayPal, which acquired tech-heavy crypto custody firm Curv in March of last year and was revealed earlier this year to be looking into a US dollar-backed “PayPal Coin.”
“We want people who acquire digital currencies on our platform to be able to use them to do something, whether that’s buying NFTs or interacting with games or other things, and stablecoins are a component of that and important for the commerce and payments aspect to growing,” da Ponte explained.