PayPal has announced that its users will now be able to transfer their money from PayPal accounts to other wallets and exchanges.
This new measure is a response to the growing demand from its customers to open up to the potential of bitcoin. Since Bitcoin is an open network, any compatible bitcoin address can be used to send or receive bitcoin. However, due to regulatory obstacles, institutions may restrict transactions and only allow purchase, sale and transfer of bitcoin within their own platform.
Now, PayPal customers can transfer bitcoin freely to any external and compatible bitcoin address. As a permissionless, borderless and interoperable network for transactions, the Bitcoin network offers enormous value to its users, but restricting or limiting transactions only hurts the entity imposing such restrictions as it castrates the value for the users.
“This feature has been the most demanded by our users since we started offering cryptocurrency purchases on our platform,” said Jose Fernandez da Ponte, SVP and general manager of blockchain, crypto and digital currencies at PayPal.
Customers are responsible for network fees when making external transfers, but internal transfers within PayPal have no fees.
“If users have crypto somewhere else and want to consolidate, they can bring it into PayPal from external addresses,” Fernandez da Ponte said. “They can also send crypto to anyone who is in the PayPal system.”
The first time PayPal mentioned the possibility of its users being able to buy, hold, or sell bitcoin was in October 2020.
It wasn’t until March 2021 that it announced the launch of Checkout with Crypto, a new feature that allows consumers to pay directly in bitcoin at millions of businesses.
The launch of this function managed to expand PayPal’s investments, which included its partnership with Paxos (a financial institution).
PayPal and Paxos
The partnership between the two entities is intended to enable PayPal customers to include this new function to pay with their wallets directly.
Last year, Fernandez da Ponte confirmed that offering its users the ability to make transfers would be PayPal’s next step.
“It’s a natural conversion for our users who want to do more with their digital assets,” Fernandez da Ponte said. “We see ourselves as a conduit between the fiduciary, or traditional financial, environment and the web3 environment. We facilitate connectivity with other wallets, exchanges, and applications.”
The bitcoin community will continue to pressure PayPal as the work is not complete. The next step for the company is to integrate the Lightning Network.
