PayPal Eyes Purchase Of Cryptocurrency Custodian BitGo: Report

PayPal Holdings Inc PYPL is in talks with digital asset custodian BitGo for an acquisition deal, according to Bloomberg.

What Happened: A deal could be reached within weeks but discussions are still in the early stages, people familiar with the matter told Bloomberg. PayPal might consider other potential targets if the negotiations fall apart.

BitGo, a California-based digital assets custodian, offers multi-signature wallet services. Multiple signatures generated from unique private keys are needed for routing transactions through such wallets.

The terms of the deal are unknown. BitGo was last valued at $170 million in a 2018 funding round, according to Pitchbook data reported by Bloomberg.

Why Does It Matter: Earlier this week, PayPal announced it is adding digital assets like Bitcoin, Bitcoin Cash, Ether, and Litecoin to its online payments platform — allowing users to buy, sell, and hold cryptocurrencies.

PayPal plans to streamline cryptocurrencies as a funding source at its merchant partners sometime in 2021. Presently, the online payments solution provider only allows the self-custody of cryptocurrencies and does not permit users to transfer them to other PayPal accounts.

PayPal’s new launch drew mixed reactions from the blockchain and digital assets community.

Price Action: PayPal shares closed 4.29% lower at $203.93 on Thursday, and inched slightly higher in the after-hours session.