- Online payment giant PayPal got criticized for enabling crypto to buy from US retailers.
- Anti-crypto activist David Gerald also slammed PayPal payment service, stating it’s bad for US customers.
- It is not clear yet as to how PayPal is going to help its new day traders deal with their tax obligations.
Economist and Bitcoin critic Nouriel Roubini criticized PayPal for bringing “crypto gambling” to US retailers. According to him, permitting its customers to shop using BTC and other altcoins is bad for customers and for PayPal.
PayPal brings crypto gambling to US retail. Bad for customers, bad for PayPal https://t.co/1gLvxRXFnS
— Nouriel Roubini (@Nouriel) October 26, 2020
In his tweet, Roubini linked an article by David Gerard calling the new PayPal service as crypto gambling. Gerard is an anti-crypto activist, Wikipedia editor, and author of Attack of the 50 Foot Blockchain.
Ripping Off Investors Through Crypto?
Notably, Gerard in his article says that PayPal is trying to rip off retail investors through crypto offerings. Also, if PayPal pursues this crypto trading market, there would be trouble when investors get ripped off.
Gerard further went on to compare the online payment giant with stock trading app Robinhood.
I’m baffled that PayPal would offer this. Are they trying to get into the bored day-trader market that apps like Robinhood live off, except cryptos rather than stocks?
The author pointed out loopholes associated with the PayPal crypto services. Actually, the PayPal crypto payment service has also received numerous critics for having multiple limitations.
PayPal Crypto Payment Service Shortcomings
It is not clear yet as to how PayPal is going to help its new day traders deal with their tax obligations. However, in the US, every individual crypto trade is a taxable event. Already, the International Revenue Service (IRS) has been requesting bulk data from retail-heavy exchanges like Coinbase.
Moreover, it is also unclear if users can deposit their own coins, or if they can only buy coins on the service. Adding on, Paypal users cannot withdraw coins, and that cash was the only way out.
PayPal’s other new offering is to top up the user’s account with crypto and spend like real money. Merchants will only see actual money — the crypto will be sold via Paxos behind the scenes.
Gerard noted that,
Nobody will buy bitcoins just so that they can deposit them into their PayPal to spend like dollars. They’ll just spend the dollars.
Recently, PayPal announced its entry into the cryptocurrency market. In detail, the company will enable clients to use crypto to shop at any merchant starting from early 2021.