PayPal appears to be warming up to cryptocurrency based on two pieces of important news since the beginning of December 2018. On 14 December, Coinbase, the largest Bitcoin exchange headquartered in the United States, announced that customers in the USA could now instantly withdraw fiat into PayPal for zero fees. A week earlier, it was revealed that the payment processor had launched an internal blockchain and cryptocurrency which incentivizes innovation.
Early Bitcoiners may remember that PayPal was particularly harsh towards cryptocurrency users, and provided no protection to people who were dealing cryptocurrency with its services. However, times are changing. In May 2018, PayPal CFO John Rainey said, “Right now, we don’t see a lot of interest from our merchants. But if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that.”
Rainey was inferring that cryptocurrency was not suitable for merchants due to its volatility. It appears a fix has arrived with instant conversion to fiat, perhaps facilitated by its new partnership with Coinbase.
The partnership has accelerated fiat withdrawals from 2-5 business days to instantaneous. Further, fees when using PayPal withdrawals have been slashed to zero. This feature is only available for US customers right now but will be rolled out to more countries in 2019.
Meanwhile, PayPal employees are now using blockchain and cryptocurrency on a daily basis thanks to the new incentive program. Employees receive tokens for participating in innovation programs and contributing ideas, and comments for each transaction are posted on a publicly viewable blockchain. The internal blockchain and cryptocurrency for PayPal launched in March 2018 and has been tested since then by its San Jose innovation lab, before being deemed ready for worldwide launch in December.
Employees can redeem the PayPal tokens for over 100 “experiences”, including poker nights with executives, coffee and running with the CFO, martial arts with the CEO, or borrowing the Head of Investor Relations’ dog.
There is still no sign that PayPal will begin allowing the safe sale of cryptocurrency on its platform, or launch its token to the public.
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