PayPal Holdings Inc. plans to allow customers to buy cryptocurrency through their accounts and use cryptocurrency for merchant payments.
The company announced Wednesday that it is introducing a way for customers to buy, hold, and sell certain cryptocurrencies within the PayPal
wallet. This will roll out over the coming weeks in the U.S.
Initially, PayPal users will be able to buy Bitcoin
PayPal intends to bring this function to its Venmo platform and to certain international markets in the first half of next year.
Shares are up 3.7% in premarket trading Wednesday.
Starting early next year, PayPal users will be able to use cryptocurrency to pay for goods or services from merchants who accept PayPal. “Consumers will be able to instantly convert their selected cryptocurrency balance to fiat currency, with certainty of value and no incremental fees,” the company said in a release. PayPal argued that this move will “significantly increase cryptocurrency’s utility.”
PayPal also disclosed in its release that it has obtained a conditional Bitlicense by the New York State Department of Financial Services. The Bitlicense helps “encourage, promote, and assist interested institutions to have a well-regulated way to access the New York virtual currency marketplace,” NYDFS superintendent Linda Lacewell said in PayPal’s release.
PayPal Chief Executive Dan Schulman said in the release that PayPal is “eager to work with central banks and regulators around the world to offer our support, and to meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce.”
Financial technology companies have dabbled in cryptocurrency over recent years. PayPal rival Square Inc.
first allowed some customers to buy and sell Bitcoin through its app about three years ago, and it’s rolled out that feature more broadly since then.
PayPal shares have added 15% over the past three months, as the S&P 500
has gained 5.7%.