Payments giant PayPal is reinventing itself as a crypto-inclusive platform with the launch of its Cryptocurrencies Hub. Available to select users, the new service will allow the sale and purchase of cryptocurrencies on the platform.
Among other functionalities, the main feature of the Hub is to allow users to hold a crypto asset balance, and buy, sell, receive, and send crypto assets. This includes transactions where the proceeds from a sale of crypto assets will be used to pay for purchases through PayPal, and to convert between $PYUSD and another crypto asset.
PayPal had recently launched its dollar-backed stablecoin PayPal USD ($PYUSD) earlier this month. Built on Ethereum, the stablecoin is fully backed by US dollar deposits, short-term treasuries and similar cash equivalents.
The latest launch announcement clarified users that any balance in their Cryptocurrencies Hub would represent their ownership of the amount of each crypto asset shown. They will not be holding the digital crypto assets themselves in their crypto asset balance.
While some custody, trading, and transfer services for assets will be performed by Paxos Trust Company, LLC, other appropriately licensed or otherwise authorised service providers will also be involved. The dollar-pegged stablecoin $PYUSD is also issued by Paxos Trust.
However, the service is not available to all PayPal users. It will be upon the company to decide its access from person to person. One needs to have a personal PayPal account and a Balance Account in good standing. It will be verified by the company where they will check the required identifying information provided by the user. This includes name, physical address, date of birth and taxpayer identification number provided by the users.
On top of this, Cryptocurrencies Hub as part of your Balance Account can only be accessed through one’s personal PayPal account. Hawaii residents have been restricted from establishing an account in the Hub at the moment. Talking about the rollout further, the PayPal stated: “We will automatically link your Cryptocurrencies Hub to your personal PayPal account. Your login credentials for your personal PayPal account act as the credentials to access your Cryptocurrencies Hub as part of your Balance Account.”
The announcement started off with a warning highlighting the inherent risk involved in buying and selling cryptocurrencies. It also made its users aware of the tax consequences that could be there when one sells, and in certain situations transfers, one’s crypto assets.
The Cryptocurrencies Hub can be accessed by an individual who is a resident of the United States or one of its territories, and is at least 18 years old, or the age of majority in your state or territory of residence.
The users will have the full responsibility of maintaining adequate security and control of any and all IDs, passwords, personal identification numbers, or any other codes that you use to access your Cryptocurrencies Hub and the PayPal services. They have also been advised to keep their physical address, mailing address, email address and other personal information current in their PayPal profile.