PayPal has entered the cryptocurrency market and will give customers the ability to buy, hold and sell coins when its service begins rolling out next week.
It follows the firm’s announcement last year that cryptocurrencies would become a permitted payment type on its service, which caused the price of many cryptos to surge.
Customers will be able to buy cryptocurrency worth as little as £1 through PayPal and can fund the purchases directly from their PayPal account.
While there will be no fees charged to hold cryptocurrency in a PayPal account, there are transaction fees that are always associated with cryptos as well as currency conversion fees for moving to a different coin.
The high price of transactions is one of the major disadvantages of popular coins like Bitcoin and this can fluctuate rapidly. Currently, a transaction costs around $3 (£2.19) although this soared to over $60 for a short time in April this year.
“The pandemic has accelerated digital change and innovation across all aspects of our lives – including the digitisation of money and greater consumer adoption of digital financial services,” said Jose Fernandez da Ponte of PayPal’s cryptocurrency department.
“Our global reach, digital payments expertise, and knowledge of consumer and businesses, combined with rigorous security and compliance controls provides us the unique opportunity, and the responsibility, to help people in the UK to explore cryptocurrency.
“We are committed to continue working closely with regulators in the UK, and around the world, to offer our support—and meaningfully contribute to shaping the role digital currencies will play in the future of global finance and commerce.”
PayPal confirmed the new service will begin rolling out this week in the UK, and be available to all eligible customers within the next few weeks. But UK customers are still unable to make purchases at participating businesses using cryptocurrencies, unlike account holders in the US.
In July, the European Commission proposed that cryptocurrency transactions should be made traceable, in order to help authorities investigate money laundering. The proposals would effectively expand financial rules governing traditional financial service providers to cover cryptocurrency service providers.
