How will PayPal’s new cryptocurrency service affect its stock performance and push the acceptance of digital currencies?
- PayPal enabled U.S. merchants to transact in cryptocurrency, enhancing digital asset integration. PayPal shares fluctuated post-announcement, reflecting mixed market reactions to crypto expansion.
Against the backdrop of a surging wave of cryptocurrency adoption, the year 2024 has marked a significant turning point, largely fueled by the launch of Exchange-Traded Funds (ETFs).
This growing acceptance isn’t just among retail investors; it has also spread to Wall Street and political leaders, who are showing great enthusiasm for digital currencies.
PayPal’s crypto adoption
Seeing this trend, PayPal Holdings (PYPL.O) announced on the 25th of September that it will enable U.S. merchants to buy, hold, and sell cryptocurrency directly from their business accounts.
Commenting on this development, José Fernández da Ponte, Senior Vice President of Blockchain, Cryptocurrency, and Digital Currencies at PayPal, stated in a press release,
“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.”
He further added,
“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.”
What’s more?
That being said, initially, the service will not be accessible to business clients located in the state of New York, according to the company, which did not specify a timeline for future availability.
For those unaware, PayPal is among the limited number of firms that have secured New York’s stringent BitLicense, and it also holds a trust license issued by the state’s Department of Financial Services.
PayPal’s venture into cryptocurrency services dates back to August of last year when it introduced PayPal USD (PYUSD/USD), a stablecoin pegged to the U.S. dollar, designed to enhance the use of digital tokens in transactions.
As of now, it ranks as the sixth-largest stablecoin, boasting a market capitalization of over $709 million, as reported by CoinMarketCap.
Additionally, PayPal has already enabled its customers to buy, sell, and hold various cryptocurrencies within their online wallets, further solidifying its presence in the digital currency space.
Impact on PayPal shares
Following this announcement, PayPal shares experienced a slight dip, closing 1.25% lower at $77.36 during the regular trading session on the 25th of September.
However, the stock rebounded with a marginal gain of 0.08% in after-hours trading, and as of the latest update, it has risen further by 1.47%.
Source: Google Finance
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