PayPal announces Bitcoin buying, holding and selling
PayPal announced that U.S. customers would be able to buy, hold and sell Bitcoin and selected other cryptocurrencies directly inside PayPal accounts.
On October 21, PayPal announced a cryptocurrency service built with Paxos. The initial U.S. rollout supported Bitcoin, Ether, Bitcoin Cash and Litecoin, with plans to expand to Venmo and selected international markets.
The model was custodial: PayPal and its partners handled trading and custody, so users did not initially receive the same control as someone holding Bitcoin private keys. PayPal also planned to let customers use crypto balances as a funding source for purchases, converting them to fiat before merchants received payment.
The announcement mattered because PayPal already served hundreds of millions of users and millions of merchants. It dramatically lowered the interface barrier to Bitcoin exposure even while leaving the self-custody tradeoff unresolved.