PayPal has become the latest recipient of the coveted BitLicense from the New York Department of Financial Services (NYDFS). The payments company is now seeking to expand its industry footprint, starting with allowing users to withdraw their digital assets to other wallets and exchanges.
PayPal first revealed that it was offering digital asset services back in October 2020, announcing that it would allow users to buy, hold or sell select digital assets. At the time, the NYDFS superintendent Linda Lacewell announced that she had granted the company a conditional BitLicense, the first of its kind, allowing it to offer its services in the state of New York.
This conditional license has now been upgraded, and PayPal is fully licensed to serve New Yorkers.
The BitLicense will allow the company to offer more services to New Yorkers and the rest of its global user base, which stands at 346 million active users. The first of these services is the ability to withdraw one’s digital assets to external wallets. Previously, users could only sell their digital assets for fiat, which they could then withdraw, but now they can transfer them to their hardware wallets, exchanges, or even to staking pools and DeFi platforms where they can earn some income.
We’re excited to announce that PayPal will begin supporting the transfer of cryptocurrencies between PayPal and other wallets and exchanges. This feature is rolling out to all eligible US customers in the coming weeks. Learn more: https://t.co/PelvFv7eRW pic.twitter.com/YkzPOV7teq
— PayPal (@PayPal) June 7, 2022
“We are definitely responding to demand from users, that is one aspect. We’ve also been very vocal from the beginning that we’re in this because we are a payments and commerce company, and we think that our role in the ecosystem is about increasing access,” Jose Fernandez da Ponte, the company’s senior vice president for blockchain and digital assets stated in an interview this week.
“This is really about access and utility. We are greatly enhancing the utility of moving crypto around,” he addes.
For PayPal, digital assets are a critical area for growth. Traditionally, the company has focused on bringing in new users to keep growing its revenues. However, in light of increased competition, the company has pivoted to encouraging existing users to use its app for more than just the online checkout services and cross-border funds transfer it’s known for.
The average revenue per account has been observed to double for customers who use PayPal more than the services it’s known for. And it gets even better with digital currencies, with those using PayPal to buy digital assets being twice as likely to open their PayPal wallets.
“We think a substantial amount of commerce and payments will happen on digital currencies in the future, and we are playing the long game,” Ponte added.
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