The brainchild of Elon Musk back in the early 90s when the first pioneers of the internet were making their mark, Paypal evolved from x.com, into one of the largest digital payment systems in the world. And now, Paypal has become the very first company in the United States to hold New York’s Full Virtual Currency License.
Paypal first applied for the conditional license back in 2020, when it introduced the ability to purchase crypto through its platform. Since then, Paypal has introduced a slew of features, catering to the crypto community. In the next couple of weeks, Paypal will now allow users in the United States to send crypto to friends and family free of charge.
This means the ability to pay for simple services like a lunch or movie will be as simple as the push of a button from the Paypal app. This sort of functionality is already available in a plethora of other exchanges but nothing as wide-reaching as Paypal.
Will this be the beginning of the true digitization of the dollar like we see in technologically advanced countries like Japan or China with WeChat?
What Is The New York Virtual License?
In the summer of 2020, when the world grappled with a global pandemic, the New York Department of Financial Services (NYFDS) was hard at work creating a new license to practice digital commerce in the State of New York. PayPal, alongside Paxos, a stablecoin issuer, received the first conditional licenses back in October of 2020.
Since then, the New York Department of Financial Services has issued licenses to over 20 other crypto protocols and projects. The license has been dubbed the “BitLicense” because of its profound association with the crypto community now.
NYFDS Superintendent Adrienne Harris in an interview with Coindesk expanded on the new license’s role in the digital currency markets,
“The conditional virtual currency license allows businesses to have well-regulated access to the New York marketplace through partnerships with licensed firms, ensuring that New Yorkers have access to a wide variety of virtual currency products with appropriate consumer protections,” she said.
“With PayPal’s conversion to a BitLicense, the conditional license is now a proven framework for licensure.”
PayPal Features Coming Soon
Not only is Paypal creating an adequate framework with the state government of New York but they are also pushing far beyond just their ecosystem. In a move that would be seen as rare for the industry, Paypal announced that amongst its new features alongside the virtual license is the ability to move assets past the PayPal ecosystem.
This means customers will now have the ability to withdraw cryptocurrency assets to either private or third-party wallets.
In most cases, this would be seen as a loss for the company. Primarily because those funds are funds that could be reinvested and held by Paypal while the user decides what to do with them. Instead, Paypal is biting the bullet and preferring to lose out on those assets instead of customer satisfaction.
Because at the end of the day if the customer isn’t completely satisfied and ease of use is not simple—then crypto adoption will be much slower paced and there will be less willingness for its adoption.
Senior Vice President of Blockchain, Crypto, and Digital Currencies, Jose Fernandez de Ponte explained to Coindesk,
“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.”