The first bitcoin have been purchased on PayPal.
The news is given by the co-founder and CEO of Circle, Jeremy Allaire, who on Twitter shared a screenshot of a purchase confirmation of about 0.0075 BTC paid $100.
Bought $100 in BTC on @PayPal ! Great milestone for the market! pic.twitter.com/jsxAxTpGgK
— Jeremy Allaire (@jerallaire) October 28, 2020
The purchase price was $13,265, which was the price tonight plus a slight spread, and no fees were charged.
For the moment, PayPal is not a non-custodial BTC wallet, but only an intermediary, allowing its US users to buy and sell bitcoin on Paxos, but using PayPal as a unique interface.
This means that the cryptocurrency transactions actually take place on the Paxos Crypto Brokerage platform, apparently without fees, but the user performs them on PayPal, which applies a spread on the price.
It is fair to imagine that part of this spread is used by PayPal to pay the Paxos service.
These are purchases made on a centralized exchange, without being recorded on the blockchain, so as to avoid fees.
Buying bitcoin on PayPal
Allaire hasn’t posted any further screenshots, for example to show the deposit of the 0.0075 BTC on his account, but what is known is that, although they are not physically stored on PayPal, they can be sold with a similar procedure.
Curiously enough, the first to give the news, complete with screenshots, was the CEO of a company that in some ways could be a competitor of PayPal.
In fact, Circle collaborates closely with Coinbase, with which it issued USDC, the second most widespread stablecoin in the world based on the US dollar.
Clearly, the news is considered so important for the entire crypto industry that even the CEO of a company that in some ways competes with PayPal has decided to advertise it.
It is worth noting, however, that Coinbase itself seems to have been collaborating with PayPal for some time, considering that a few months ago it enabled the possibility of withdrawing in fiat currency to a PayPal account. At this point, one could also imagine a potential future collaboration between the two companies, for example to provide liquidity in cryptocurrency to PayPal.