Soon after PayPal announced to support cryptocurrency, the crypto community reacted in excitement as a traditional company with 346 million customers recognizes the potential of cryptocurrency.
No Control of Private Keys
According to PayPal’s official statement, users can buy, sell, and hold a cryptocurrency over the platform. But there is a limitation as users cannot send or receive cryptocurrency across the platform. Moreover, they will not have control of the private keys. “The crypto in your account cannot be transferred to other accounts on or off PayPal,” PayPal stated.
What’s more, the company has not mentioned in the statement that withdrawals in cryptocurrency “would be allowed in the future.”
Some influential actors in the crypto community are not happy with PayPal entry and also advise people to avoid it as PayPal will not allow people to hold private keys. Trezor wallet creator Satoshi Labs stated,” Do not use PayPal for bitcoin; there are many other places to buy crypto which will let you keep ownership of your coins.”
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The rival companies are providing the services of crypto withdrawals. For instance, Jack Dorsey-led payment company Square unlocked the facility of crypto withdrawals last year. Similarly, RobinHood has also unveiled its plan to offer this service.
Cory Klippsten, the founder of bitcoin app Swan Bitcoin, hopes that PayPal will offer services, including control of people on their assets, in the future. However, it is risky to hold crypto assets over a centralized platform.
RobinHood and Square have generated returns in millions of dollars after announcing support for cryptocurrency. In Q2, Square generated revenue of $875 million which is up 600% over the yearly timeframe.
Besides reservations and concerns about PayPal, investors have reacted very positively and sent Bitcoin to a yearly high of $13,200. Bitcoin is close to overturning $13k as it is currently trading at $12,951 after surging by 14.29% over the last seven days.
When Facebook announced to launch cryptocurrency known as Libra, PayPal was a member of the Libra Association. Libra became a victim of legal prosecution and PayPal left it along with other founding members.