PayPal Enables Crypto Withdrawals to Non-Custodial Wallets
In addition to allowing users to withdraw crypto assets to external wallets like MetaMask, PayPal is enabling its users to transfer digital assets between themselves.
By: Owen Fernau •DeFi News
Robinhood couldn’t have all the fun.
After the financial services company which pioneered commission-free stock trading enabled crypto withdrawals in April, payments giant PayPal has launched the same feature.
In addition to allowing users to withdraw crypto assets to external wallets like MetaMask, PayPal is enabling its users to transfer digital assets between themselves. Users will also be able to transfer their assets into PayPal (and presumably sell them for US dollars) according to the press release from the fintech giant.
Users who move their assets to external wallets will be able to interact with the broader DeFi ecosystem, participating in financial transactions like taking out permissionless loans, and providing liquidity to automated market makers (AMMs) like Uniswap.
According to the company, the ability to transfer crypto has been one of the most requested features since the company started facilitating digital asset purchases. Demand for the feature suggests that the broader crypto ecosystem has attracted people’s attention — people may not be content with just speculating on crypto, they want to earn yield. And buy NFTs.
While the development does ring of adoption, by using the feature, users will essentially be tying their non-custodial wallets to their personal information held by PayPal. This would make it trivial for the company to monitor its users’ on-chain activity unless they take the added step of using a privacy-preserving service like Tornado Cash.
PayPal has 429M active accounts, according to its 2022 Q1 earnings release. In comparison, Robinhood has 22.8M users according to Statista, showcasing the older company’s broader reach. At $102.6B, Paypal’s market capitalization is also an order of magnitude larger than Robinhood’s, which stands at $7.3B as of June 7.