Today, news broke that PayPal is ready to launch cryptocurrency payments to merchants, allowing its massive userbase of millions to pay with Bitcoin and the other altcoins has offered since the middle of last year.
However, like all things related to centralized platforms getting involved in cryptocurrencies, there’s a catch.
PayPal To Allow Customers To Pay With Bitcoin, Litecoin, Ethereum and BCH
As the company promised when cryptocurrency support was first announced, PayPal has followed up with rolling out support to allow customers to pay at its 29 million merchants globally.
PayPal users can now pay for goods and services through the platform using the four assets offered, including Bitcoin, Litecoin, Ethereum, and Bitcoin Cash.
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The initial announcement that the company would offer cryptocurrencies is the spark that set off the bull run, but the execution of their plan has been criticized since.
PayPal doesn’t allow users to move cryptocurrencies out of their custody to a wallet of their own choosing – defeating the purpose of the technology itself. In addition to issues with storing crypto assets, there’s also a catch when it comes to spending crypto.
Could the PayPal news be enough to push Bitcoin through resistance to new all-time highs? | Source: BTCUSD on TradingView.com
Paying With Crypto Involves First Swapping To Fiat
The PayPal news caused Bitcoin to once again rocket higher, and it could be the necessary momentum to push the cryptocurrency through resistance and to new all-time highs.
The initial PayPal news caused the breakout to begin with, so another leg higher could be in the cards. Regardless of the bullish price action resulting from the more recent news, once again its not all positive for cryptocurrency users.
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In the same vein as other technology-defeating methods the company utilizes, PayPal also swaps any crypto assets out for fiat immediately before making the transaction. What’s really happening is that cryptocurrencies themselves aren’t being spent, but instead are being sold into cash and cash itself is being exchanged.
Rather relying on each cryptocurrency’s respective protocol to handle the transaction from wallet to wallet, PayPal has instead created a centralized system and wallet garden yet again. Companies like the brand have taken on a “if you can’t beat ’em, join ’em” approach with crypto over the last year or so, but have stopped short of fully embracing what the technology itself has to offer.
Who knows, though. Perhaps PayPal is doing its users a favor by encouraging them to hold rather than spend, which in the past has proven to be a mistake anyway.
Featured image from Deposit Photos, Charts from TradingView.com
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Author: Tony Spilotro