Fintech giant PayPal plans to offer direct sales of cryptocurrency to its 325 million users, according to industry sources.
Currently, PayPal can be used as an alternative means for withdrawing funds from exchanges such as Coinbase, but this would be a first in terms of offering direct sales of crypto, Yahoo Finance reported.
“My understanding is that they are going to allow buys and sells of crypto directly from PayPal and Venmo,” a well-placed industry source told CoinDesk. “They are going to have some sort of a built-in wallet functionality so you can store it there.”
It is unclear which or how many cryptocurrencies would be available. The industry source said they expected PayPal “would be working with multiple exchanges to source liquidity.”
A second source confirmed that PayPal is looking to offer buying and selling of crypto and said the service could be expected “in the next three months, maybe sooner.”
PayPal declined to comment on the plans.
San Francisco-based crypto exchange Coinbase and Luxembourg-based Bitstamp were mentioned as likely contenders by the sources. Both Coinbase and Bitstamp declined to comment.
It’s worth noting that PayPal has a longstanding relationship with Coinbase, going back as early as 2016. In 2018, Coinbase made instant fiat withdrawals to PayPal available for US customers. Last year, European Coinbase users could withdraw to their PayPal accounts, followed by users in Canada.
Meanwhile, fintech apps that offer crypto are making money. Square, the payments unicorn launched by Twitter CEO Jack Dorsey, rolled out bitcoinpurchases in its Cash App in mid-2018. Cash App reported $306 million in bitcoin revenue in its most recent earnings report.
London-based Revolut, which began offering crypto to users following a 2017 partnership with Bitstamp, raised $500 million in February, valuing the platform at $5.5 billion. Robinhood, the fintech app thought to be fueling the recent retail boom in equities day trading, first offered crypto in February 2018.
Crypto is increasingly seen as an obvious way to bolster user numbers on fintech apps and create new revenue streams. Indeed, PayPal CEO Dan Schulman has made it clear his plan this year is to aggressively monetize Venmo, which has over 52 million accounts.
Hiring push
PayPal’s recent hiring push supports the claim that it is moving into crypto.
The global payments platform’s job listings, posted on PayPal’s own boards, include a request for a technical lead/cryptocurrency engineer set to join a team in Chennai, India, ZDNet reported.
A successful applicant would become part of PayPal’s “Crypto Engineering Team” in the region, which the company says is “responsible for new initiatives for PayPal global with focus on agility, time to market and innovation.” This includes the development of crypto-related products and features that are suitable for the PayPal platform.
The listing emphasizes the need for someone able to build and maintain Internet applications and services, with a focus on expertise in security, symmetric and asymmetric cryptography, crypto libraries, and software development.
The second listing of note asks for a blockchain research engineer to work with the company in exploring emerging technologies and their potential applications within PayPal.
Twitter reaction
News of PayPal’s reported move elicited an excited reaction from the crypto Twitterati.
The Wolf of All Stress tweeted: “If PayPal and Venmo are truly entering crypto, then this is arguably the most bullish news that we have seen in the space… ever.”
This is BAKKT x10. If PayPal and Venmo are truly entering crypto, then this is arguably the most bullish news that we have seen in the space… ever. https://t.co/PelWHZvJ3U
— The Wolf Of All Streets
(@scottmelker) June 22, 2020
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Prominent crypto YouTuber Lark Davis was equally enthiusiastic: “If confirmed true this is beyond big. The coming bull run will be insane.”
Crypto researcher Ryan Watkins tweeted: “PayPal is planning to roll out crypto purchases in the next three months. PayPal has 325 million users. Venmo is the largest consumer finance app in the US. As [famed Wall Street investor] Paul Tudor Jones said ‘Bull markets are built on an ever-expanding universe of buyers.’”
Bitcoin educator Jimmy Song pointed out that 10 years ago, PayPal froze WikiLeaks’ account, creating a demand for Bitcoin as a donation medium.
Song tweeted: “PayPal is going allow people to buy #Bitcoin. Paypal is the company that froze the WikiLeaks account and put #Bitcoin on the map back in 2010. It only took a decade for this to come full circle.”