In a Sept. 25 announcement, Payment giant PayPal revealed that PayPal Business accounts now have the ability to buy, sell, and trade crypto directly from their PayPal accounts.
The new functionality will be available across the United States for all US merchants except those in New York.
Jose Fernandez da Ponte, the senior vice president of blockchain, cryptocurrency, and digital currencies at PayPal had this to say about the new feature:
“Business owners have increasingly expressed a desire for the same cryptocurrency capabilities available to consumers. We’re excited to meet that demand by delivering this new offering, empowering them to engage with digital currencies effortlessly.”
Merchants using the service will also have the option of withdrawing their digital assets to external wallets or colder forms of storage for added security.
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PayPal enters the stablecoin game
In August 2023, PayPal launched the PYUSD stablecoin. The PayPal-United States Dollar (PYUSD)stablecoin was issued by Paxos and is fully overcollateralized — meaning that the stablecoin is backed by US dollar deposits and short-term cash equivalents. PYUSD is fully redeemable at a 1:1 ratio with the US dollar.
The payments company later expanded PYUSD to the Solana network — citing Solana’s (SOL) significantly lower transaction costs. PayPal hopes that these lowered costs will encourage the use of PYUSD for smaller purchases like coffee or lunch at a restaurant.
Typically, smaller purchases are prohibitive on lower throughput blockchains that come with higher fees and slower finality times. To put this into perspective, a transaction on Solana could be as low as $0.0025, but transactions on Ethereum can cost double-digit figures — especially during times of network congestion.
As a bonus, PayPal announced that PYUSD on Solana would feature “confidential transactions” — a method of obscuring the payment amount to the public but allowing the transaction itself to remain visible for compliance purposes.
More recently, PYUSD has grown to a $1 billion market capitalization — but still lags behind Tether (USDT) and Circle’s dollar-pegged stablecoin (USDC). As of August 2024, Tether boasted a staggering $118 billion market capitalization and Circle had a $35 billion market capitalization.
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