PayPal To Partner With Broker For Cryptocurrency Offerings On Its Platform: Report

Paypal Holdings Inc PYPL is reportedly partnering with New York-based cryptocurrency broker Paxos to let users on its platform purchase or sell virtual assets, according to CoinDesk.

What Happened

Paxos offers an API that makes it easier to sell, purchase, hold, and send cryptocurrencies, CoinDesk noted. The broker is also purportedly permitted to hold digital assets on behalf of institutional investors.

Last week, it was reported that PayPal and its subsidiary Venmo, a mobile payment service, plan to launch direct sales of cryptocurrency to their user bases. The Palo Alto-based company later confirmed the move.

London-based Revolut, a fintech startup with more than 120,000 customers, launched cryptocurrency trading in 49 U.S. states in partnership with Paxos last week, Mashable reported.

Why It Matters

There is no clarity yet on what cryptocurrencies the payments company plans to offer on its platform. The fintech firm would be joining Square Inc. SQ and Robinhood among the mainstream platforms to be involved with virtual assets.

PayPal previously exited Facebook Inc.-led FB Libra cryptocurrency project in 2019, as it faced increased regulatory scrutiny.

The company's Chief Executive Officer Dan Schulman said late last year that virtual assets are too volatile, and there's little demand for them on PayPal's platforms.

“On the [cryptocurrency] side, it’s still very volatile, and therefore, we don’t have much demand for it by merchants because merchants operate on very small margins," he said.

Price Action

PayPal shares closed about 2.4% higher at $173.92 on Friday.