PayPal’s Checkout, which was announced Tuesday, would allow bitcoin (BTC), ether (ETH), bitcoin cash (BCH), and litecoin (LTC) to be easily converted into US dollars or other fiat currencies when making transactions, much as a credit card or a debit card would operate inside a PayPal wallet – meaning merchants would not be the actual recipients of cryptocurrencies.
Despite the fact that the payments giant had said it was working on this feature last year, the news was enough to send the currencies involved, especially Bitcoin, up over $1,000.
The checkout service is all about pushing mainstream adoption of cryptocurrencies, according to PayPal CEO Dan Schulman, who described it as “a modern way for businesses to get paid.”
In a quote, Schulman said, “Enabling cryptocurrencies to make transactions at businesses around the world is the next chapter in pushing the ubiquity and mass adoption of digital currencies.”
The product is “rolling out to PayPal customers in the United States from today and will be available globally to customers in the United States in the coming weeks,” according to the company in a blog post.
Launched with a bang
Banks and institutional investors are becoming involved in cryptocurrencies, but the use of bitcoin and other crypto tokens for purchasing products has always been limited due to their uncertainty.
PayPal, which made a big splash when it announced its entrance into the crypto space in October, needs to iron out the kinks and enlist the support of its massive merchant network.
PayPal has raised weekly payment caps twice since launching the crypto service, from $10,000 to $15,000 and then to $20,000.
Visa confirmed this week that it was testing payments functionality through crypto-backed Visa cards using USDC stablecoin, a cryptocurrency that is pegged to the US dollar and runs on the Ethereum blockchain.
According to a press release, PayPal’s merchants will not incur any extra integrations or costs, and fiat conversions will take place at the regular PayPal conversion rates.
Nonetheless, there are a few important caveats in the “Checkout with Crypto” terms and conditions. The most significant of these is the tax liability: “Sales of Crypto Assets through Checkout with Crypto, like all other Crypto Assets sales, are taxable.”
PayPal will send a 1099 tax form to the customer and, if applicable, report to the Internal Revenue Service, but “it is your duty to decide what taxes, if any, apply to transactions you make.”
The Checkout with Crypto service “may not be available as a funding solution for all retailers, customers, or transactions,” according to the T&C.
This news is now all over Twitter with the overwhelming majority of pro-Bitcoin accounts seeing it as a massive step forward for Bitcoin along with the entire cryptocurrency space.
At the time of writing 30th March 2021 7.52PM the price of Bitcoin is $58,852.50 (Already up 2.6% in the past 24 hours, according to blockchain.com).