Bitcoin and other cryptocurrencies have struggled for legitimacy and acceptance since their inception. It's been a turbulent journey, but the acceptance of Bitcoin by PayPal could be the final push that puts crypto over the edge.
Crypto Access Through PayPal Now Open for UK Residents
Following an announcement in August, PayPal has now completely rolled out its UK crypto services. Today, UK residents can now use PayPal to purchase, sell, and hold the popular cryptocurrencies Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
Of course, PayPal's offerings are a far cry from what one can find with most cryptocurrency exchanges. While the four cryptocurrencies available are the most popular, they represent only a fraction of the thousands of distinct cryptocurrencies out there. Furthermore, PayPal doesn't allow direct transfers of crypto, only the conversion back and forth to pounds.
The main benefit is that it makes it easy for anyone to buy Bitcoin regardless of their technological know-how. It also exposes the full UK PayPal userbase to quick access to Bitcoin, further driving widespread acceptance.
UK Services Come Nearly a Year After PayPal First Offers Crypto to US Users
Within the US, PayPal users are restricted to the same four cryptocurrencies that those in the UK are. However, they have access to one more essential aspect of the service that hasn't yet been made available to the UK.
US PayPal users can make purchases at eligible online stores using their crypto balance. This added functionality makes holding crypto through PayPal much more enticing. While all the system is actually doing is converting the crypto back to US dollars before the purchase, it's a step in the right direction and available with no additional fees.
While there are many other factors at play, the acceptance of crypto on PayPal in the US immediately preceded the meteoric rise of Bitcoin's price from the range of $11,000 upwards of $60,000 between October 2020 and April 2021. While PayPal's crypto offerings are just another step in the ongoing widespread acceptance of cryptocurrencies, it might be the most significant step.
The Effect of Increased Access Through PayPal on the Crypto Market
For most of crypto history, traders have had to rely on crypto exchanges to turn official currencies like pounds and US dollars into Bitcoin and other cryptocurrencies. While there have been marked improvements over the years, this has always been a sticking point for many potential investors.
Many don't understand the nuances of wallet addresses, and some simply don't want to trust banking or credit card details to some grey area website. Both groups now have clear and open access to Bitcoin through PayPal. It's both easy to use and widely trusted by nearly everyone.
While these PayPal users are missing out on a substantial portion of crypto functionality, they are now able to invest in cryptocurrencies. Given the massive increase in value that Bitcoin and other cryptocurrencies have seen over the past year, this wider access will translate to significantly more retail investors buying crypto.
While UK PayPal crypto services are somewhat lacking in themselves, they're a sign that widespread acceptance is unambiguously on the rise. As more and more companies begin to enter the space, the number of options will increase as well. This implementation by mainstream companies is also paving the way for innovative fintech startups to offer more services.
Among the most significant challenges for any crypto venture is navigating regulations. By leading the way on how to deal with the FCA and establishing a precedent, PayPal is making it possible for future ventures to navigate the regulatory framework as well.
Extensive Fraud Checks Implemented
Due to rising complaints related to bitcoin fraud PayPal has implemented a series of protocols which prompt users to verify to high-risk transactions. Additional safety measures such as text message or 3D verification are becoming more prominent. According to industry watch dog website ScamCryptoRobots.com, the amount and severity of scams related to fake celebrity endorsements has quadrupled during the last couple of years. False or misleading advertising remains the largest contributer to investment scams as well as other types of scams.
Building a Solid Foundation for the Future of Crypto
Among the most important aspects of PayPal's crypto services is that they are laying a foundation for the future. It doesn't matter if PayPal continues to offer these services or if a significant number of customers use them.
PayPal's entrance into crypto has shown that crypto is no longer a legal grey area that manages to get by undetected. Instead, crypto is being implemented by some of the largest companies in the world with full approval from national governments, and it seems that this trend will continue into the future.