PayPal launches cryptocurrency payments sending Bitcoin’s price soaring
PayPal, Visa and Bakkt have all announced various forms of cryptocurrency payments on their networks.
- PayPal launches cryptocurrency payments in the US.
- Bitcoin reaches 10-day high of $78,148 (US$59,650) following back to back PayPal and Visa announcements.
- Tether announces attestation that all $35 billion of USDT is backed by assets of equal value.
PayPal has announced today that users in the US can now pay with cryptocurrency through the PayPal app, sending the price of Bitcoin soaring to a 10-day high of $78,148 (US$59,650).
The payments juggernaut announced that it would be available to all US-based users and who can use cryptocurrency to pay at the checkout at any one of PayPal's 29 million connected retailers. According to CEO Dan Schulman, the process will be just as easy as paying with a credit card, saying:
"This is the first time you can seamlessly use cryptocurrencies in the same way as a credit card or a debit card inside your PayPal wallet."
The development follows the introduction of cryptocurrency purchases inside the PayPal app, which went live for US customers in late 2020 and included support for Bitcoin, Ethereum, Litecoin and Bitcoin Cash. The payments service will be called "Checkout with Crypto" and users will be able to use one of the four supported currencies and will pay no transaction fees.
As for merchants, PayPal will convert cryptocurrency to fiat currencies upon checkout, with PayPal specifying that "All transactions are settled in USD and converted to the applicable currency for the business at the standard PayPal conversion rates." PayPal did not specify if merchants would be able to accept cryptocurrency itself for payment, unlike Tesla which now accepts true Bitcoin payments for new cars.
PayPal follows yesterday's announcement by Visa that it would be trialling USDC stablecoin payments over Ethereum through the Visa network. Unlike PayPal though, Visa will be accepting actual cryptocurrency from crypto debit card users, with transactions settled over Ethereum sent to Visa's own Ethereum address.
Tether attests USDT reserves fully backed
In more news that is likely to be bullish for the market, the world's largest stablecoin issuer Tether has published an attestation that its $35 billion worth of USDT stablecoins is backed by the same amount of reserve assets.
This is significant, as historically Tether has failed to provide sufficient evidence that its stablecoins were backed by a 1:1 holding of dollars, which even caused a 10% crash in the price of the USDT a few years ago.
There's also a popular belief that the supply of Tether helps prop up the price of Bitcoin, which implies that if Tether were to collapse, then the price of Bitcoin would follow.
The attestation was produced by a Cayman Islands-based accounting firm Moore Cayman, and while an attestation is not the same as an audit, it puts Tether on a similar footing as fellow stablecoin providers USDC and PAXOS.
Disclosure: The author owns a range of cryptocurrencies at the time of writing