Digital asset markets have awoken today, with many top assets revisiting all-time-highs. While the reasons for this swift upward swing are plentiful, PayPal has no doubt played a large role. After months of anticipation, PayPal has announced the launch of its ‘Checkout with Crypto’ service.
Checkout with Crypto
This new service, which was first alluded to month ago, is a boon for both consumers and merchants alike. Consumers interested in spending their digital asset holdings now have a safe and easy means to do so, for basically any item they could ever want. Merchants on the other hand incur no risk, yet stand to draw in business from digital asset enthusiasts that would have previously shopped elsewhere.
‘With Checkout with Crypto, cryptocurrency is another way for customers to pay and businesses to get paid, adding enhanced utility for cryptocurrency holders.’
With a network totaling over 29 million merchants, this is a massive step forwards for the mainstream usage of digital assets. No longer will Bitcoin be reserved for niche purchases, or solely as a store of value. Bitcoin and its counterparts will now be used for the purchase of everyday items, big and small.
Upon announcing the launch of this anticipated service, PayPal CEO, Dan Schulman, took the time to comment.
“As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies, while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet…Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies.”
While ‘Checkout with Crypto’ is a great step forward for the utility of digital assets, it does come with a few restrictions.
Firstly, consumers and merchants are only utilizing digital assets in an indirect manner. When a consumer pays for an item with a cryptocurrency, PayPal immediately converts the asset to FIAT, and then pays the merchant with that. The purpose of this conversion is to ensure that consumers and merchants alike are not subject to sudden fluctuations in asset value. While the volatility of cryptocurrencies is expected to continue dropping with time, the reality is that as of today, anything outside of a stablecoin is too unpredictable for direct spending.
Secondly, this new service is currently limited to residents of the United States only. While PayPal has previously stated that it anticipated expanding its digital asset buy/sell capabilities across the globe in 2021, there are no guarantees that the ‘checkout with crypto’ service will find itself included in this initial expansion.
Thirdly, the service is limited to the select few digital assets supported on the PayPal platform. This means Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Much like its anticipated global expansion, PayPal has also stated in the past that it would consider expanding its stable of supported assets in time. With markets demonstrating such a positive response to PayPal involvement in digital assets, it would stand to reason that this expansion will happen sooner than later.
The progress being made at PayPal surrounding its support for digital assets is a necessary one if it wants to continue leading the way in adoption of cryptocurrencies among likeminded companies.
Only yesterday, we were reporting on developments being made at payment processing giant, VISA. While VISA has not yet launched digital asset spending capabilities, it is actively piloting various programs involving their use. These include a program which would allow traditional banks to get in on the action through unique API suites, as well as another built to facilitate transaction settlements with stablecoins.
If one thing has been made clear by companies such as those discussed here today, it is that the game has only just begun, and each is ‘all-in’ on the adoption of digital assets.