Requesting 1/1000 of a bitcoin... for the truffle pizza we shared last night. Venmo-owner PayPal is launching crypto buying, selling, and shopping on its service. While buying/selling crypto isn't novel, the spending part is:
- PayPal users will be able to shop at the 26M merchants on its network starting in early 2021. Think: paying for your burger or Bloomies in bitcoin.
- US account holders can start buying virtual coins on PayPal in the next few weeks — PayPal's planning to bring this to Venmo and other countries next year.
- BTW: The merchants won't actually get paid in crypto. PayPal is basically handling sales on the backend to turn your bitcoin into regular bucks.
Big on the crypto... small on the currency. Crypto hasn’t been widely adopted as a real currency for three key reasons: lack of trust, lack of acceptance, and price volatility. You don't want to spend a bitcoin on a Birkin bag if that same coin could be worth double next week. Also: crypto transactions tend to be slower than traditional payments.
This could be crypto’s mainstream moment... or not. With 346M active accounts, PayPal has waaaayy bigger reach than other crypto-slinging fintechs. That's why bitcoin hit a record high for 2020 on PayPal's news. Just like GM’s EV Hummer could bring non-EVers to the electric side, PayPal could help normalize crypto. There's also a big chance that people won't see any value in using it, too.