According to recent reports, PayPal has now chosen Paxos Crypto Brokerage to launch its own crypto services. That's based on information said to have been supplied by two sources who are "familiar" with the deal. So it may not be best to take at face value. But, if true, it could kick off a wave of cryptocurrency adoption. Especially since PayPal recently claimed over 300-million active accounts.
An announcement could follow as early as this week, sources indicate.
Details on a PayPal-Paxos deal are still slim but could be coming soon enough
Paxos Crypto Brokerage is still a very new company, having only just launched within the last month. Headquartered out of New York, its first client, Revolut U.S., was announced at the time of launch.
The company offers up an API-based service. That means that fintech firms can integrate Paxos Crypto Brokerage's API to integrate crypto services. Specifically, that API allows for crypto buying, selling, holding, and sending. Those functionalities, when the API is used, are integrated into existing applications. And that is likely to be the same route chosen if a PayPal partnership is forthcoming.
PayPal will almost certainly simply integrate the services into its mainstream application. At least to start.
For Paxos Crypto Brokerage's part, the company takes care of the crypto-side of things. That includes regulations, technology, liquidity, etc. It'll ultimately be up to PayPal to ensure that users are getting a good experience. And that's where the long-standing digital money management and payments company may have its biggest advantage.
What is PayPal up against?
Now, PayPal will have some fierce competition in the space already, even without consideration for the top cryptocurrency-specific companies. Robinhood, Square's Cash App, eToro, and SoFi all already offer crypto services. As noted above, PayPal's biggest advantage will be that it already has an established userbase. And it's already well established for managing payments. The company's initial launch was way back in 1998.
While unconfirmed by either Paxos or PayPal, reports on the matter are also not unreasonable. PayPal revealed to the European Commission that it would be developing just such capabilities back in March. It effectively confirmed as much again last month. Paxos CEO Charles Cascarilla, meanwhile, has recently indicated that the company is prepared to scale up. And has noted that services offered by Paxos are potentially a tipping point for mainstream adoption.
A PayPal partnership could be just the catalyst needed to see that come to fruition.