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PayPal finally allows users to transfer digital currencies to an external wallet or exchange, nearly two years after the first payments giant open to cryptocurrency.
The feature is currently available to select users in the United States with plans to expand nationwide in the coming weeks. It will initially support Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
This comes at a time when other major fintechs have made similar changes to their strategy of opening up their offerings. For example, trading app Robinhood is working on a new web3-focused crypto wallet for power users of DeFi and NFT.
Additionally, PayPal also became the latest beneficiary of New York’s virtual currency license.
New York Department of Financial Services Superintendent Adrienne Harris said, “The Virtual Currency Conditional License allows businesses to have well-regulated access to the New York market through partnerships with licensed businesses, ensuring that New Yorkers have access to a wide variety of virtual currency products with appropriate consumer protections.
“With PayPal’s conversion to BitLicense, Conditional Licensing is now a proven framework for licensing.”
The new ability to transfer outside of PayPal will incur network fees based on the respective blockchain used, but transfers between PayPal users will be free.
To protect user privacy, the company will generate a new recipient address for each transaction in a PayPal wallet. It will also not charge fees for incoming transfers.
Despite the appearance of PayPal conservative attitude towards crypto, there is clearly a lot going on behind the scenes at the company. In March 2021 it acquired asset security firm Curv and earlier this year hidden files suggested that the company explore the US dollar-backed “PayPal Coin”.
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