PayPal and Venmo to Allow Users to Withdraw Cryptocurrency to Third Party Wallets

PayPal and Venmo users who trade or invest in cryptocurrency through the platform will soon be able to move their digital coins to third-party wallets. PayPal said on Wednesday it plans to allow users to withdraw cryptocurrency to third-party wallets. As of now, clients can purchase and sell digital currency on the platform, yet they can’t send it somewhere else. That is going to change.

The news was before announced by Coindesk, referring to remarks from Jose Fernandez da Ponte, who heads PayPal’s blockchain, crypto, and digital currencies business unit. Talking at CoinDesk’s Consensus 2021 meeting, Fernandez da Ponte said, “They want to bring their crypto to us so they can use it in commerce, and we want them to be able to take the crypto they acquired with us and take it to the destination of their choice.” The head of the cryptocurrency reportedly said that the changes will also apply to Venmo. Though it’s still unclear as to when the platforms will enable transfers to external wallets. 

PayPal got into the cryptocurrency market last year in October, opening its platform for investors but their service was limited and they basically considered crypto only as investment assets rather than a currency you can send to other people, not unlike cash.

Currently, Paypal’s terms and conditions for its crypto service state that “You currently are not able to send crypto assets to family or friends, or withdraw crypto assets from your Cryptocurrencies Hub to an external cryptocurrency wallet. You also cannot use crypto assets directly as currency to pay for goods or services. If you want to withdraw the value from your Cryptocurrencies Hub you will need to sell your crypto assets and withdraw the cash proceeds from their sale or use those cash proceeds to pay for purchases.”

Other mainstream fintech companies, such as mobile payments provider Square and stock trading app firm Robinhood Markets, allow users to buy and sell cryptocurrencies.

Nonetheless, PayPal and Venmo’s new update will benefit the users and might even tempt new users to get into cryptocurrency investment/trading considering the fact that the crypto market took a big hit the previous week and this might be a golden opportunity to explore the market while it is down.