PayPal, the fintech giant that is planning to bring cryptocurrency trading to its massive user base, has chosen Paxos to manage the new service's digital asset delivery, according to two sources familiar with the matter. This is good news as it appears that the cryptocurrency trading platforms have been on the rise among investors lately
Who is Paxos
This is a big assignment for Paxos, a New York-based company that launched Paxos Crypto Brokerage last week and announced its first customer Revolut US, the United Kingdom-based American division of the fintech company that offers bitcoin trading. .
A formal PayPal announcement could come this week, a source said. The collaboration with Paxos would make PayPal one of the most important mainstream companies in the cryptocurrency purchasing sector, joining the payment manager listed on the Square stock exchange and the Robinhood stock broker platform. It is not clear exactly which PayPal cryptocurrencies intend to offer.
The new Paxos brokerage, an API-based solution to simplify the implementation of cryptographic services for companies, allows you to buy, sell, hold and send crypto assets, while managing all aspects of regulatory compliance.
Paxos, which previously obtained a release from New York State, is a qualified custodian, legally authorized to hold gold and digital assets such as bitcoin (BTC) and ether (ETH) on behalf of institutional investors.
The San Francisco Coinbase-based cryptocurrency exchange, which has a long-standing relationship with PayPal, is said to be planning a white-labeled service with the payment manager. The European exchange Bitstamp (which provides crypto liquidity to Revolut in the UK) is another possible contender in this story.
PayPal could create a turning point for cryptocurrencies
The crypto sections within traditional fintech apps are constantly growing. Crypto-products are moving from being pseudo-assets with a marginal charm to becoming a must for fintech apps and for banks looking to gain new revenue and customers.
In addition to Revolut entering the U.S. market with cryptocurrency trading, Square, the payment unicorn launched by Twitter CEO Jack Dorsey, has seen its bitcoin trading revenue grow.
Square launched bitcoin purchases in its app in mid-2018 and in the latest earnings report reported $ 306 million in bitcoin revenue. Robinhood, the favorite fintech app of the new generation of day traders, launched a crypto program for the first time in February 2018.
In a post published last week, Paxos CEO Charles Cascarilla said his company's new brokerage service could be a "turning point" for cryptocurrencies, hinting that other customers would be arriving.
In an interview with The Block, Cascarilla said that Paxos is ready to scale its internal exchange, itBit, to meet the needs of new customers.
PayPal is a publicly traded company. At the time of this writing, the PayPal shares they are priced at USD 175,58 to NASDAQ, down 1,81% from yesterday's performance.
