As of today, PayPal Holdings Inc has joined the cryptocurrency market, which allows customers to buy, sell, and hold bitcoin and other virtual coins using the U.S. digital payments company’s online wallets.
In a statement, the company said that customers will be able to use the cryptocurrencies to shop at the 26 million merchants on its network starting early 2021.
President and Chief Executive Dan Schulman said in an interview that the company hopes to encourage global use of virtual coins and prepare its network for new digital currencies that may be developed by central banks and corporations.
He said, “We are working with central banks and thinking of all forms of digital currencies and how PayPal can play a role.”
The company says that U.S. account holders will be able to buy, sell, and hold cryptocurrencies in their PayPal wallets. They plan to expand to Venmo and some other countries at the beginning of 2021.
Other mainstream fintech companies like Square Inc and stock trading app firm Robinhood Markets Inc, allows users to buy and sell cryptocurrencies but Paypal’s launch is notable due to their large reach of customers.
The San Jose, California-based company has 346 million active accounts around the world and processed $222 billion in payments in the second quarter.
Cryptocurrencies tend to be unpredictable, which makes them attractive to speculators, but a lot less appealing to merchants and shoppers. Transactions have been slower and cost more than other mainstream payment systems.
The company says that cryptocurrency payments on PayPal will be settled using fiat currencies like the U.S. dollar, meaning merchants will not receive payments in virtual coins.
Over the years, many central banks around the world have expressed the need to develop digital versions of their currencies. Facebook Inc-let the start of a cryptocurrency project called Libra in 2019, where Paypal was a founding member but dropped out over a short period of months.
Paypal will partner with Paxos Trust to allow purchases of bitcoin and other cryptocurrencies called ethereum, bitcoin cash and litecoin.