PayPal’s move to let users buy, sell, and hold cryptocurrencies on its platform, and to allow cryptocurrencies to be used to pay for goods and services with its 26 million merchants, is set to benefit mass cryptocurrency adoption more than it will the company’s profits.
In a report, Morgan Stanley researchers claimed that the move should “expand crypto acceptance online, which to date has stalled at 1% of the top 500 internet retailers,” although it is unclear if PayPal’s earnings will benefit from the move.
According to CoinDesk, Morgan Stanley’s researchers added that introducing bitcoin, ether, litecoin, and bitcoin cash to its platform is likely “immaterial to earnings.” They wrote:
Assuming PayPal is able to scale its crypto trading activity to Square’s current level, it would only add [0.3%] of growth to PayPal’s ~$21.3 billion.
The analysts noted that boosting cryptocurrency acceptance does not necessarily mean higher transaction volumes. Other upsides of supporting cryptocurrencies, they added, include staying competitive with rival Square, and attracting a new user base to PayPal itself.
As CryptoGlobe reported, PayPal’s new service only supports the U.S. for now, although the firm is planning to “expand the features to Venmo and select international markets in the first half of 2021. Paxos Trust company is helping PayPal deal with cryptoassets
CoinShares’ Chief Strategy Officer Meltem Demirors, speaking to CNBC, said that the new feature could be “paving the way” for PayPal to launch its own cryptocurrency, possibly within the next 6-12 months. Demirors pointed out the feature will be a “huge on-ramp for consumers” and make access to cryptocurrencies easier.
Featured image via Pexels.