The purchase of bitcoin via Paypal was until now a scam. Not anymore. Jose Fernandez da Ponte, the Mr. crypto of Paypal, said during the Coindesk Consensus conference that it will soon be possible to withdraw your bitcoins to other wallets.
Not your key, not your bitcoin
Paypal made a big splash in the crypto world last year by allowing its US customers to buy and sell different cryptocurrencies. Bitcoin, but also Ethereum, bitcoin cash and litecoin. Venmo is the app for buying and selling these cryptocurrencies.
However, actually owning your bitcoins requires two things: a public key and a private key. The public key is the address of your wallet while the private key is the one giving you control of the wallet.
With PayPal, only a public address was available so far. The old firm ofElon musk has always been strongly criticized for this heresy. CNBC also titled at the beginning of May “Your bitcoins on paypal do not belong to you”:
Paypal is now an exchange
Paypal has completed its transformation and its customers will now be able to send their bitcoins to other wallets. This is a total paradigm shift since it was previously only possible to withdraw them in the form of fiat currency.
” We want our customers to be able to withdraw their cryptocurrency wherever they want “, said da Ponte.
By the way, this decision is an opportunity to recall that the US administration wants to legislate on the issue of private wallets …
The US Treasury indeed proposed on December 18, 2020 to force exchanges to transfer bitcoins only to wallets of which they know the identity of the owner. Coinbase, the largest American exchange, then rebelled:
” The recently proposed government regulations would create new transparency requirements. We would be required to collect information on the people with whom you conduct transactions through your wallet, and share it with the administration. We believe that this proposal represents too much of an intrusion into your privacy. If you would like to learn more, including how to bring your concerns directly to the Treasury before this regulation is finalized, please read our blog post. “
Hopefully such legislation never sees the light of day because it would mean the end of private / open source wallets. This is technically impossible anyway, not to mention the vast majority of bitcoins (87%) are already on elusive private wallets.
It will therefore be interesting to see what will be the positioning of Paypal on this question on D-Day.
Journalist / Bitcoin, geopolitics, economy, energy, climate
The comments and opinions expressed in this article are those of the author alone, and should not be considered as investment advice. Do your own research before making any investment decisions.