Bitcoin surges past $13,000 after PayPal allows cryptocurrency buying and selling

Bitcoin surged 8 % during overnight trading in NY to break past $13,000 for the very first time since 2019 after global online payment provider PayPal said on Wednesday it'll allow customers to use cryptocurrencies.

The digital coin increased another 2 % to $13,119 during early trading in Asia on Thursday. Other digital coins also gained on PayPal's news, including litecoin, which rose a lot more than 13 %, and Bitcoin Cash, up 9 per cent.

PayPal’s US users should be able to utilize the new digital coin service over the coming weeks, the united states company said in a statement.

PayPal users will primarily have the ability to buy, sell and hold Bitcoin and other cryptocurrencies such as ethereum, Bitcoin cash and litecoin. The business has obtained a conditional cryptocurrency licence from the New York State Department of Financial Services and partnered with New York-based FinTech start-up Paxos to deliver the service.

The payments giant intends to bring the function to its Venmo platform and plans to introduce it to certain international markets in the first half of next year.

PayPal customers in markets beyond your US can use cryptocurrencies to look from 26 million merchants on its network from next year, the company said. Cryptocurrency payments on the platform will be settled using fiat currencies, including the US dollar, meaning merchants won't receive payments in virtual coins.

“The shift to digital kinds of currencies is inevitable,” Dan Schulman, PayPal's president and leader, said. “We are eager to use central banks and regulators all over the world to provide our support, and meaningfully contribute to shaping the role that digital currencies will play later on of global finance and commerce.”

The coronavirus pandemic has accelerated the shift from cash towards digital payments. When Covid-19 struck, Bitcoin asserted itself as a safe haven for panicking investors. With the united states Federal Reserve and other central bankers launching stimulus programmes and devaluing paper currencies, hard assets such as for example cryptocurrencies and gold with limited supply have appreciated in value.

PayPal, based in San Jose, California, hopes the service will inspire global utilization of virtual coins and prepare its network for new digital currencies which may be produced by central banks and corporations.

Many central banks all over the world have expressed their intention to build up digital versions of their currencies in the coming years.

Financial technology companies have dabbled in cryptocurrency over recent years. Mobile payments provider Square first allowed some customers to buy and sell Bitcoin through its app about three years ago. Stock trading iphone app firm Robinhood also allows users to get and sell cryptocurrencies. But PayPal’s move could give a boost to cryptocurrency use due to its vast reach.

The Silicon Valley payments giant has 346 million active accounts all over the world and processed $222 billion in payments in the second quarter.

PayPal was also among the initial founding members of Libra association, a cryptocurrency project formed by Facebook in 2019. However, it was one of the first companies that dropped out after regulatory pressure mounted on the venture.

But interest in cryptocurrencies is resurging despite the reluctance of mainstream lenders to engage with it.

This week, Bitcoin just as before tested the $12,000 mark for the next time this season. However, prices remain far below the levels seen through the trading frenzy in 2017 when Bitcoin's value touched record highs.