Fintech giant PayPal confirmed its long-awaited move into digital assets… offering its 346 million users the chance to buy, hold and sell bitcoin, bitcoin cash, ether and litecoin… While the cryptosphere acknowledges the bullishness of a firm the size of PayPal making a move into the space, there was also concern that the new service does not allow bitcoin or other cryptocurrencies to be withdrawn or deposited…
[PayPal:] “Currently, you can only hold the cryptocurrencies that you buy on PayPal in your account. Additionally, the crypto in your account cannot be transferred to other accounts on or off Paypal”… The view from some informed takes is that while PayPal did not need to impose such restrictions, it’s probably a case of taking things by degree; a “crawl before you can walk” approach.
As such, the current setup is being compared to Robinhood – which also offers crypto but in a confined space – but hopefully moving in the direction of Square – which started the same, but now allows limited withdrawals to non-custodial wallets.
[Executive director of Coin Center:] “Simply allowing people the ability to buy and hold and sell back crypto I imagine is something they studied… It may simply be that’s what most people want to do with cryptocurrency at the moment, and the demand to move it around and transact is not as high. And if that’s the case, it’s much easier from a regulatory perspective and from a user support perspective, to simply allow that option without having the ability to transact.”