PayPal Set To Expand Bitcoin Trading In The UK And May Embrace DeFi

Global payments giant, PayPal, has announced its interest in expanding crypto trading services in the United Kingdom. British clients can access the service through the newly launched “Super App.”

PayPal made the announcement during the Q2 earnings call on July 28. The company’s CEO, Dan Schulman, hinted that crypto trading in the UK would be available by next month. By launching this service, PayPal will be meeting some of its objectives given during the first quarter of 2021.

“Yeah well, we continue to be really pleased with the momentum we’re seeing on crypto. We’re going to launch, hopefully, maybe even next month in the UK,” Schulman stated.

Adding Functionality to Crypto Trading

The announcement did not mention bitcoin directly but rather categorized all the cryptocurrencies. According to Schulman, adding functionality to the company’s crypto trading services would give thousands of UK clients exposure to cryptocurrencies.

Schulman also took note of the increased crypto trading activities on Venmo. During the second quarter, PayPal increased Venmo’s value proposition to enable buyers and sellers to trade in a protected manner.

Besides expanding in the UK, Schulman did not give in-depth details on how PayPal would boost user experience. PayPal only allows users to trade bitcoin on the platform internally using an internal IOU. One of the most-requested features on the platform is allowing users to withdraw bitcoin to personal wallets. However, PayPal is yet to announce plans to develop such a feature.

However, bitcoin users on PayPal had a glimmer of hope as Schulman also mentioned the firm was working on allowing crypto transfers to third-party wallets. The feature will change how crypto buyers on the firm can access various services.

“We’re working right now on transfers to third-party wallets, and we really want to make sure that we create a very seamless process for taxes and tax reporting. And so we’re really looking at how do we integrate that into both the trading and the buy with crypto on our platform,” Shulman stated.

In mid-July, PayPal increased the weekly purchasing limit from $20,000 to $100,000. The company also removed the annual limit. The move was to boost the adoption of the service and foster more trading activities from crypto buyers and sellers.

Schulman also mentioned that PayPal was looking into open banking integration to the Automated Clearing House (ACH). This integration will boost the speed at which transactions are processed. Through ACH, PayPal enables merchants on the platform to collect payments automatically by debiting buyer accounts.

In the earnings call, Schulman also mentioned the 183% year-on-year revenue growth for Venmo. The increased revenues were mainly attributed to the growing adoption of crypto services. Venmo is a subsidiary of PayPal with over 70 million users, and it launched crypto trading services in April.

DeFi Integration

Schulman also hinted at the possibility of PayPal venturing into decentralized finance (DeFi). According to Schulman, the payment giant was researching smart contracts and decentralized apps (dApps) and how they can be integrated into PayPal.

“How can we use smart contracts more efficiently? How can we digitize assets and open those up to consumers that may not have had access to them before? There are some interesting DeFi applications as well. And so we are working really hard,” he stated.

It is not the first time that PayPal has shown interest in DeFi. During the EthCC Conference in Paris last week, it was rumored that PayPal was working with Uniswap to help in DeFi integration. Uniswap is the largest decentralized exchange; hence working with the firm will be a big step for PayPal.

PayPal is also launching a new product dubbed “super app”, which will offer “high-yield savings, early access to direct deposit funds, new and improved bill pay functionality, messaging capabilities,” among others. PayPal has been working on the product for a while, and according to the firm, it is now ready for launch.

The updates made by PayPal regarding crypto trading on the platform could be in line with guaranteeing the full functionality of the super app.

The announcement also showed that the payments firm is interested in going beyond bitcoin and cryptocurrencies and looking into the offerings of the broader crypto market, as there was also a mention of central bank digital currencies (CBDCs).

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