LONDON (Reuters)-On Wednesday, PayPal Holdings Inc. PYPL.O said it will enable customers to keep bitcoin and other virtual coins in its online wallet and shop at the 26 million merchants on its network using cryptocurrencies.
The new service allows PayPal one of the largest U.S. corporations to have access to cryptocurrencies for customers, which may help Bitcoin and competing cryptocurrencies gain broader acceptance as viable methods of payment.
In an interview, President and Chief Executive Dan Schulman said the San Jose, California-based company hopes the service can promote the global use of virtual coins and prepare its network for new digital currencies that central banks and businesses will create.
“We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role,” he said.
Over the coming weeks, U.S. account holders will be able to purchase, sell, and keep cryptocurrencies in their PayPal wallets, the company stated. In the first half of 2021, PayPal aims to extend the service to its peer-to-peer payment app, Venmo, and some other nations.
From early next year, the company said, the ability to make payments with cryptocurrencies would be accessible.
Other mainstream fintech firms, such as Square Inc. SQ. N, a mobile payment company, and Robinhood Markets Inc., a stock trading app firm, allow users to buy and sell cryptocurrencies, but the launch of PayPal is noteworthy given its scale.
The company has 346 million active accounts around the world and processed $222 billion in payments in the second quarter.
PayPal’s shares were up 4% at 1418 GMT, set for their best day in a month.
Bitcoin BTC = BTSP on the news reached its peak since July 2019. At $12,494 it was last up 4.8 percent, bringing returns above 75 percent for the year for the original and biggest cryptocurrency. The size of PayPal meant the move would be a plus for bitcoin prices, crypto-currency market players said. “Overall, the price effect would be positive,” said Joseph Edwards of Enigma Securities, a London crypto-currency brokerage. “There’s no comparison with regards to the potential exposure between the upside of PayPal offering this, and the upside of any similar previous offering.”
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