PayPal revealed users cannot transfer their cryptocurrency into or out of PayPal and won’t have control of their private keys. Thus, users should read the fine print first before using BTC via PayPal.
Crypto users became excited when the payment giant 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.
After that, bitcoin surged in price settling above the $13,000 mark, at the time of writing.
PayPal Regulations Violate Crypto Ethics
The fine print states that users will not have control of their private keys permitting crypto transactions. This specifically means that these keys will remain in the hands of PayPal executives. On the contrary, bitcoin and crypto were designed to be decentralized and eliminate third-parties.
Moreover, people won’t be allowed to transfer their BTC or crypto into or out of their PayPal accounts. Such regulations have created a lot of tension in the crypto world.
Satoshi Labs, the company behind the new Trezor wallet, advised all of its users to avoid utilizing bitcoin via the payment platform.
The blog post read:
Do not use PayPal for bitcoin. There are many other places to buy crypto which will let you keep ownership of your coins.
Prior to this, PayPal’s former top executive Bill Harris once called bitcoin a scam.
On the other hand, Brad Garlinghouse, the CEO at Ripple, also noted that,
2 steps forward, 1 step back. Great to see a payment pioneer leaning in, BUT disappointing some fundamental tenets/benefits of crypto are spurned.
PayPal Crypto Services
Earlier this month, the company partnered with Paxos to deliver crypto payment services. The coins initially supported will include Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).
In line with this, PayPal obtained a conditional cryptocurrency license from the New York State Department of Financial Services (NYSDFS), commonly known as the BitLicense.
PayPal is known as one of the largest global payment providers, with 346 million active accounts. Additionally, it processed $222 billion in volume during Q2 2020.