PayPal may use Paxos’ brokerage service to add crypto trading to its services.
In fact, following the rumour a few weeks ago that PayPal is preparing to provide an integrated cryptocurrency trading service, another rumour claims that this will be provided through Paxos Crypto Brokerage.
A few days ago Paxos announced the launch of this new service that allows other companies to integrate the purchase, sale, custody and sending of cryptocurrencies within their applications.
It is an API-based solution that provides direct and immediate access to crypto markets in a fully compliant manner.
The first company to choose Paxos Crypto Brokerage was Revolut US, offering its US customers not only purchase and sale but also storage of tokens. As this service is based on API, the application that uses it acts as a user interface, while all the operational features that involve handling cryptocurrency custody reside physically on the servers of Paxos.
This actually allows users of the applications to own the tokens, even though the service is custodial.
Neither PayPal nor Paxos have denied these rumours, which suggests that they might not be entirely inaccurate.
Moreover, the hypothesis that also PayPal will use a service like Paxos Crypto Brokerage, as Revolut US already does, appears to be plausible.
Indeed, the CEO and co-founder of Paxos, Charles Cascarilla, said:
“The digital asset revolution has started and more and more companies like Revolut see it coming”.
In order to offer competitive prices, PayPal must be able to draw on a market with ample liquidity, which to date is still lacking in the cryptocurrency space. The use of a service like the one offered by Paxos solves this problem.
Finally, both Paxos and PayPal are American companies, compliant with American regulations, and it is perhaps also for this reason that Paxos has been chosen as a partner by Revolut for the US market.
However, it is not yet clear which cryptocurrencies will be tradable on PayPal.