Payment giant PayPal is entering the crypto space in a big way. Shortly after launching its USD-pegged, Ethereum-based stablecoin PYUSD, the company has announced plans to launch a crypto hub for select users.
PayPal updated its terms and conditions to introduce Cryptocurrencies Hub, which will allow users to hold and interact with Bitcoin and other cryptocurrencies right in their PayPal account.
Among other things, the hub will allow users to buy and sell cryptocurrencies, as well as facilitate the payment for purchases via PayPal using the money stored after the sale of cryptocurrencies.
Other features of the hub include the ability to hold crypto assets, convert between PYUSD and other crypto assets, sending and receiving crypto assets, and crypto market information and educational content.
Not everyone will be able to access the features on the platform though. PayPal will decide from person to person, based on the condition that the person must have “a personal PayPal account and a Balance Account in good standing.”
The prospective user will also need to complete KYC by providing information such as name, physical address, date of birth, and taxpayer identification number.
“You can only use your Cryptocurrencies Hub as part of your Balance Account by accessing it through your personal PayPal account. If you are a Hawaii resident, we will not allow you to establish a Cryptocurrencies Hub at this time,” the terms stated.
A big step for PayPal
PayPal may have seen cryptocurrencies as a competition initially, but those days are long gone. The company has now decided to identify with cryptocurrencies, and it started by allowing the buying and selling of cryptocurrencies a few years ago.
The latest move was the launch of its stablecoin, PYUSD, which although has faced much criticism, is considered a big step towards mainstream adoption of cryptocurrencies in general. The Cryptocurrency Hub project is another way of demonstrating PayPal’s commitment to becoming a crypto inclusive platform.
By enabling the buying, selling as well as swapping of crypto assets, the company only slightly falls short of being a crypto exchange, which makes it an important part of the crypto space now.
Cryptocurrency Hub could encourage PYUSD adoption
PayPal’s stablecoin PYUSD has faced a lot of resistance, and experts predict it may have a hard time seeing massive adoption. This is because of existing stablecoins such as USDT and USDC, which have already taken a significant portion of the stablecoin market.
Another hindrance to the stablecoin’s adoption is the creation of central bank digital currencies (CBDCs) which are meant to be used for similar purposes as stablecoins. It is also noteworthy that countries that don’t want to create CBDCs are opting for national stablecoins, further worsening the competition.
However with the Cryptocurrency Hub launch by PayPal, PYUSD adoption may significantly improve, especially because of the PYUSD swap feature. By allowing users to swap PYUSD and other crypto assets, users will be compelled to use the stablecoin.
This is also likely to increase the likelihood of exchanges listing the stablecoin on top exchanges, which experts say is a condition for significant adoption. Clearly, PayPal still has a lot in store to roll out in the crypto space, which is also a sure way for PYUSD to gain adoption.