PayPal Expands Crypto Services for Business Accounts to Buy, Sell, and Trade

On September 25, PayPal made a significant announcement, revealing that its Business account holders can now buy, sell, and trade cryptocurrencies directly through their PayPal accounts.

This new service will be available across the United States, excluding merchants in New York.

Jose Fernandez da Ponte, PayPal’s Senior Vice President of Blockchain, Cryptocurrency, and Digital Currencies, commented on this development:

“Business owners have increasingly expressed a desire for the same cryptocurrency capabilities available to consumers. We’re excited to meet that demand by delivering this new offering, empowering them to engage with digital currencies effortlessly.”

In addition to trading, merchants can also withdraw their digital assets to external wallets or more secure offline storage.

PayPal Enters the Stablecoin Game

In August 2023, PayPal introduced its own stablecoin, PYUSD, in partnership with Paxos. The PayPal-United States Dollar (PYUSD) stablecoin is fully backed by U.S. dollar deposits and short-term cash equivalents, making it overcollateralized. Users can redeem PYUSD at a 1:1 ratio with the U.S. dollar.

To enhance the use of PYUSD, PayPal later expanded the stablecoin to the Solana network, known for its significantly lower transaction costs. By doing so, PayPal aims to facilitate small transactions, like buying a coffee or lunch, which can be cost-prohibitive on other networks due to high fees and slow processing times. For instance, Solana transactions can cost as little as $0.0025, whereas transactions on Ethereum can reach double-digit fees, especially during network congestion.

As an added feature, PayPal announced that PYUSD on Solana would support “confidential transactions.” This feature allows the payment amount to be hidden from the public while keeping the transaction itself visible for compliance.

PYUSD has grown rapidly, reaching a market capitalization of $1 billion. However, it still trails behind industry leaders like Tether (USDT) and Circle’s USDC. As of August 2024, Tether held a massive $118 billion market capitalization, while Circle had $35 billion.

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