- Payments company, PayPal, announced yesterday it will allow US merchants to hold, buy and sell cryptocurrencies directly from their PayPal business accounts.
- This announcement follows the 2020 launch of cryptocurrency services for consumer level PayPal accounts.
- The expansion of PayPal’s PYUSD stablecoin to Solana in May of this year has led to a significant drop in transaction fees, making the use of crypto for smaller payments more feasible and increasing demand for merchant crypto services.
Global payments giant PayPal yesterday announced it will allow US-based merchants to hold, buy and sell cryptocurrency directly from their PayPal business accounts. At launch this functionality will be available across all of the US, excluding New York State.
US merchants will also be able to withdraw cryptocurrencies from their PayPal accounts to store more securely in their own digital wallets.
The addition of crypto services for business accounts comes after PayPal allowed consumers to access crypto services in 2020. Last year the payment giants also launched a stablecoin, PayPal USD (PYUSD), which is currently available on Ethereum and Solana networks.
Related: PayPal and Venmo Introduce Crypto Sending via Simple ENS Names
PayPal: Move Allows US Businesses to Engage With Digital Currencies
According to PayPal’s announcement, the addition of crypto services for business accounts is intended to increase crypto’s real-world utility. PayPal’s Senior Vice President of Blockchain, Cryptocurrencies and Digital Currencies, Jose Fernandez da Ponte, said that business owners have been crying out for access to crypto services ever since the launch of consumer level crypto services on the platform.
“Since we launched the ability for PayPal and Venmo consumers to buy, sell, and hold cryptocurrency in their wallets, we have learned a lot about how they want to use their cryptocurrency,” Fernandez da Ponte said.
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.
Jose Fernandez da Ponte, PayPalPYUSD On Solana Making Crypto Payments More Useful
PayPal launched its Paxos-issued PYUSD stablecoin in August 2023 utilising the Ethereum network. One of the limitations of an Ethereum-based stablecoin, however, is the relatively high transaction fees. To lower the cost of transactions, PayPal expanded PYUSD to the Solana network in May 2024 leading to a significant reduction in fees (in many cases over 90%).
These lowered transaction costs on Solana made PYUSD much more attractive for everyday purchases, such as cups of coffee or groceries, and this in turn increased the need for PayPal to provide crypto services for businesses.
In addition to lower fees, PYUSD on Solana also allows for ‘confidential transactions’ that keep the amount paid hidden from public view while allowing the transaction itself to remain visible for regulatory purposes.
Related: Tether Reports Record US$5.2 Billion Net Profit for First Half of 2024, USDT Market Cap Nears US$115 Billion
According to data from CoinGecko, PYUSD’s market cap has increased significantly since its launch just over a year ago, growing from around US$45 million (AU$65.8 million) in September 2023 to over US$700 million (AU$1.2 billion) at the time of writing.
However, this pales in comparison to the leading players in the space — Tether (USDT), the world’s largest stablecoin currently has a market cap of just under US$119 billion (AU$174 billion), while the second largest, USDC, has a market cap of US$36 billion (AU$52.6 billion).
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