Editor’s take: In the crypto community, there’s a popular expression that applies here. “Not your keys, not your coin,” meaning that if you don’t own the private keys associated with your cryptocurrency, you don’t really own it. With PayPal, you essentially trust your crypto to a third party, but the ability to move your holdings off the platform is coming soon.
PayPal will soon address one of the biggest shortcomings of cryptocurrency on its platform.
Since mid-October and up to this point, PayPal has offered users the ability to buy, sell and hold four types of cryptocurrency on its platform: Bitcoin, Ethereum, Bitcoin Cash and Litecoin. Notably, the crypto you buy can’t be moved off PayPal into a standalone wallet.
For some, the risk versus reward of letting someone else manage your keys is worth the gamble. Some casual crypto players may not want the stress of managing their own coins. We’ve heard time and again of people that have lost or forgotten their private keys, negating any chance that they’ll ever recover their holdings.
While it seems highly unlikely that PayPal would vanish overnight with all of its customers’ holdings, that situation wouldn’t be of concern if you had your own keys stored in a private wallet. And that is exactly what PayPal is working towards.
During the recent CoinDesk conference, VP of crypto at PayPal, Jose Fernandez da Ponte, said the company is actively working on a withdrawal function.
“We want to make it as open as possible, and we want to give choice to our consumers, something that will let them pay in any way they want to pay,” 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.”
PayPal hasn’t set a date for the debut of its withdrawal feature, but did add the ability for users to pay for goods and services with crypto back in March.
Image credit Jirapong Manustrong, Lukas Gojda