This week, mainstream payment giant, PayPal, announced it will be launching a cryptocurrency wallet and payment service soon. The company is also planning to launch the features on its mobile payments subsidiary Venmo.
In the past, PayPal was seen as a major hindrance to the wider acceptance of cryptocurrency in the mainstream sector. But it seems the company is now set to play a major role in championing the cause for crypto’s adoption.
However, Paypal’s entry into the industry has received opposing views about its impact and future consequence to the industry. While non-crypto players are endorsing the move, traditional crypto space players are not too supportive.
Divergent views trail PayPal’s crypto adoption
Non-crypto players such as Morgan Stanley’s analysts are enthusiastic about the move, claiming that PayPal’s entrance will encourage wider adoption of cryptocurrencies. But they also pointed out that the firm’s bottom line will take a longer time to improve after the adoption.
The analysts noted that Paypal’s entrance will “expand crypto acceptance online.” Up until now, crypto acceptance is still a paltry 1 percent of the top 500 internet retailers, which is too poor for an industry that has reached such magnitude of development.
But some are speculating that Paypal’s acceptance of cryptocurrency may be spurred by the company’s desire to maintain competitiveness with rival Square rather than encourage massive crypto adoption.
Violating crypto ethos
While Morgan Stanley is fully supporting Paypal’s embrace of crypto, others like Shatoshilabs are less optimistic about PayPal’s u-turn to enter the crypto market after spending years opposing it.
With a former head at PayPal calling Bitcoin a Scam, SatoshiLabs is still not convinced PayPal intends to enable the expansion of crypto adoption in the mainstream.
The custodial service means users are not able to have keys to their own coins, which is completely against the principles on which Bitcoin and cryptocurrency stand for, SatoshiLabs said.
Bitcoin eliminates third parties while transactions are carried out in a decentralized platform. But with the custodial approach of Paypal, it will eliminate these benefits crypto traders and investors are enjoying.
Based on the report by SatoshiLabs, it’s very important to keep the ethos and principles of cryptocurrency by relying less on third parties.
Although Satoshilabs insists that PayPal’s entry will restrict the movement of coins, it agreed that the regulated entity status of the payment giant may attract new users.
Banks will be scrambling to service crypto
One of the main problems cryptocurrency is having is the issue of banks not interested in working with investors with crypto-related business. But with the entry of Paypal into the podium, that may likely change as well. PayPal’s subsidiary Venmo has more than 300 million active users, which are all target audiences for Bitcoin. With PayPal’s dominance in the online payment channel, the adoption of crypto will see many banks also upping their game to meet user demands in the industry.