According to Cointelegraph, with the introduction of PayPal’s cryptocurrency services, over 350 million PayPal account holders now have access to cryptocurrency.
According to the publication, customers are required to log in to their PayPal account, where they must have available funds by credit or debit card or checking account. The fintech company requires clients to comply with Know Your Customer (KYC) verification and anti-money laundering measures, for which they must submit certain documentation, including a W-9 tax form.
According to the publication’s insights, the fintech company offers a low-risk approach to cryptocurrency asset ownership. Customers who are new to cryptocurrency and have a low risk tolerance receive benefits. In addition, PayPal encourages customers to make purchases with their bitcoin holdings by forming relationships with various retailers.
Prior to purchasing cryptocurrency assets from PayPal, users must consider the following guidelines, according to the publication’s findings:
Customers must undergo the same approval process with bitcoin exchanges
Prior to joining, cryptocurrency exchanges demand its clients to complete the same type of approval procedure. Consequently, buyers can purchase cryptocurrencies instantaneously from a platform other than PayPal.
Customers maintain their fiat equal, not cryptocurrencies
PayPal prohibits consumers from having direct access to their cryptocurrency. The platform is incapable of providing digital pockets or a pockets handle. When clients cash out their bitcoin, only fiat currency liquidity is available to them. As a result, clients will not be able to convert bitcoin to PayPal.
Customers cannot lend their digital assets
PayPal does not permit users to produce passive income from their cryptocurrencies in order to maximize their returns, whereas smart contracts eliminate the need for third parties in financial transactions.
Customers may incur significantly lower fees on bitcoin exchanges
PayPal charges exorbitant fees for its services, and cryptocurrency holdings are not expected to be kept outside of its purview. Purchased cryptocurrencies from an exchange may be more suitable for buyers. Decentralized finance (DeFi) can give passive-income opportunities such as staking to support a blockchain network, providing liquidity, or yield farming via exchanges.
Choice is limited
PayPal chose to offer only four types of cryptocurrencies, including bitcoin, ethereum, bitcoin cash, and litecoin, which are far less susceptible to dangerous value fluctuations.