What PayPal and Visa will do with cryptocurrencies
Visa and PayPal embrace cryptocurrencies. All the details
The US giants PayPal and Visa accelerate on cryptocurrencies.
Starting today, PayPal will allow US users to pay with Bitcoin, Ethereum and Litecoin. The digital payment platform has already allowed US users to buy and sell cryptocurrencies directly from their account. But now U.S. consumers will be able to use their cryptocurrency holdings to pay on PayPal around the world.
Meanwhile, Visa also announced yesterday the use of the digital currency Usd (Usdc), a stablecoin linked to the price of the US dollar, to settle Visa transactions through Ethereum, one of the most popular blockchain platforms.
After abandoning the Libra project with Facebook two years ago, the payment card giant aims to allow transactions in digital currency to be settled soon.
The offer made PayPal one of the largest mainstream financial companies to open its network to cryptocurrencies. With Visa's move, the announcements helped fuel a rally in virtual currency prices.
In particular, bitcoin resumes rising and touches a maximum of $ 59,260, not far from the absolute tops in the $ 61,000 area reached in recent weeks. Strong increases also for Ethereum (+ 6.6% to $ 1,822) and XRP (+ 4.2%) according to data from the Coindesk platform.
All the details.
THE VISA PROJECT
Yesterday Visa announced that it will open to the use of USDC digital currency to settle its transactions through Ethereum.
Usdc is a stablecoin co-founded by Circle and Coinbase and the Center consortium. To make sure the value of Usdc remains stable, Usdc partners keep Usd (dollar) on bank accounts every time they issue new tokens. These accounts are checked to make sure there are as many USDs in circulation as there are USD in those accounts.
The US company plans to offer the possibility of settling USDC transactions to other partners during the year.
Crypto.com, the new Visa partner and one of the largest cryptocurrency platforms in the world, is the first company to test the new functionality with its Visa-branded cards.
As early as last month, Visa CEO Alfred Kelly hinted at plans to allow cryptocurrency trading on its network.
COLLABORATION WITH ANCHORAGE
Through a partnership with Anchorage, Visa adds support for its first digital currency.
Anchorage is the first federally approved digital asset bank and Visa partner for digital currency settlement.
THE PILOT PROGRAM WITH CRYPTO.COM
For Crypto.com, it means it can send Usdc directly to Visa. For example, if a Crypto.com customer holds USDC in their wallet and makes a card transaction, Crypto.com does not need to convert Usdc tokens to dollars first.
You can send Usdc to Visa's Ethereum wallet address in Anchorage to settle the transaction. The merchant will then be paid by Visa in their own currency.
STRATEGY IN FAVOR OF CRYPTO-NATIVE FINTECH
Visa's treasury infrastructure updates and integration with Anchorage also strengthen Visa's ability to directly support new central bank digital currencies (CBDCs) as they emerge in the future.
WHAT PAYPAL WILL DO FOR CRYPTOCURRENCIES
Meanwhile, the US giant of digital payment services PayPal has also entered the cryptocurrency market.
The company announced that its customers will be able to buy and sell Bitcoin and other virtual currencies using their PayPal accounts.
After rolling out the ability for US users to buy and sell cryptocurrency directly from their accounts last November, PayPal takes a new step forward with its "Checkout with Crypto".
Customers who hold bitcoin, ether, bitcoin cash and litecoin in PayPal digital wallets will now be able to convert their holdings into fiat currencies at the checkout to make purchases, with no additional transaction fees.
If a merchant does not accept US dollars, PayPal also converts those dollars into the local currency at PayPal's standard conversion rates.
WHEN THE SERVICE WILL BE AVAILABLE
The service will be available to all 29 million merchants who accept PayPal's payment service.
The US company plans to start purchasing operations in the US in the coming weeks and allow them globally early next year.
CRYPTOCURRENCIES LIKE CREDIT / DEBIT CARDS IN THE PAYPAL WALLET
"This is the first time that cryptocurrencies can be safely used in the same way as a credit or debit card within the PayPal wallet," PayPal CEO Dan Schulman told Reuters before the official announcement.
On its Investor Day last week, the company reported having 377 million active accounts.
HE HAD ALREADY MADE IT SQUARE
PayPal isn't the first payment app to offer cryptocurrency support. As The Verge recalls , in 2018, its competitor Square rolled out support for Bitcoin on the Cash app.
But the launch of cryptocurrency as a form of payment makes PayPal both a major digital wallet and cryptocurrency exchange, which could make it easier to use cryptocurrency as the most common payment method.
THE GROWTH OF BITCOIN
The opening of the US giants Visa and PayPal drives up the price of cryptocurrencies.
Bitcoin's value has nearly doubled since the beginning of this year, driven by increased interest from larger financial companies that are betting on greater adoption and seeing it as a hedge against inflation.
THE QUESTION OF VOLATILITY
However, while the nascent asset is gaining ground among traditional investors, it has yet to become a popular form of payment, in part due to its continued volatility.
As Reuters points out, PayPal hopes its service will change the fact that by settling the fiat currency transaction, traders will not take the risk of volatility.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/fintech/cosa-faranno-paypal-e-visa-con-le-criptovalute/ on Tue, 30 Mar 2021 14:37:17 +0000.