PayPal, the fintech leviathan planning to bring crypto trading to its massive user base, has chosen Paxos to handle the new service’s supply of digital assets, according to two people common with the matter.
It’s a plum assignment for New York-based Paxos, which last week launched Paxos Crypto Brokerage and augured its first customer in Revolut US, the American division of the U.K.-based fintech firm that offers bitcoin trading. A formal pronouncement of the PayPal relationship could come as soon as this week, one source said.
The offering would make PayPal one of the most patent mainstream companies to offer cryptocurrency purchases, joining fellow publicly-traded payments provider Square and unicorn stock brokerage Robinhood.
It is not pellucid exactly which cryptocurrencies PayPal intends to offer. Paxos declined to comment for this story. PayPal did not home-coming reciprocity requests for comment by press time. CoinDesk broke the news of PayPal’s crypto plans on June 22.
CoinDesk discharged then that PayPal and its Venmo subsidiary would be bringing direct buying and selling of crypto to some chunk of the company’s 325 million users.
The new Paxos brokerage, an API-based solution for making crypto services easy for enterprises to roll out, allows cryptocurrency buying, selling, holding and sending capabilities – while handling all regulatory compliance circumstances. Paxos, which holds a New York state trust charter, is a qualified custodian, legally permitted to hold gold and digital assets such as bitcoin (BTC) and ether (ETH) on institutional investors’ behalf.
San Francisco-based cryptocurrency tit for tat Coinbase, which has a longstanding relationship with PayPal, was said to be in line to provide some kind of white-labeled crypto contribution. European exchange Bitstamp (which provides crypto liquidity to Revolut in the U.K.) was also mentioned as a contender at the time. Both crowds declined to comment for this story.
The crypto wings of traditional fintech apps are steadily growing in stature.
Crypto is steadily mobile from being a pseudo-asset with fringe appeal to becoming a must-have for fintech and challenger-bank apps looking to set up revenue and customers.
In addition to Revolut entering the U.S. market with crypto trading, Square, the payments unicorn boated by Twitter CEO Jack Dorsey, has seen its bitcoin trading revenues grow. Square rolled out bitcoin purchases in its Hard cash App in mid-2018 and reported $306 million in bitcoin revenue in its most recent earnings report.
Meanwhile, Robinhood, the fintech app favored by a new initiation of day traders, first offered crypto in February 2018. (Robinhood had over 2 million downloads in the quarter it released Robinhood Crypto, the unwavering’s highest count ever.)
In a blog post published last week, Paxos CEO Charles Cascarilla said his unwavering’s new brokerage service could be a “tipping point” for cryptocurrency, suggesting more clients were on the way, “from fintech apps to banks to middlemen to e-commerce brands.” In an interview with The Block, Cascarilla said Paxos is prepared to scale its own internal exchange, itBit, to into the demands of new clients.
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