Bitcoin soared as much as 8% on Wednesday after PayPal announced it would launch its own cryptocurrency service, allowing people to buy, hold and sell digital currency on its site and applications.
It also said that more than 26 million merchants using PayPal would also be able to accept cryptocurrencies as a funding source.
The Online Payments said that adding crypto was a significant milestone on the path to mainstream adoption of cryptocurrencies such as bitcoin, a statement that Bitcoin investors welcomed positively on Wednesday.
PayPal President and CEO Dan Schulman, said that the efficiency, speed and resilience of cryptocurrencies give people financial inclusion and access advantages.
“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange,” Schulman said in a statement. ”
Cryptocurrency is digital money, meaning there is no physical coin or bill — it’s all online. It is exchanged online between two parties with no involvement from traditional banks and no regulatory oversight by national governments.
People can use cryptocurrencies for quick payments without transaction fees. People can also get cryptocurrencies as an investment, hoping the value goes up. Cryptocurrencies can be bought with a credit card or, in some cases, through a process called “mining.” Cryptocurrency is stored in a digital wallet, either online, on your computer, or on other hardware.
PayPal is not the only major company betting on cryptcurrencies. Square spent $50 million to buy more than 4,700 bitcoins earlier this month. Square Chief Financial Officer Amrita Ahuja told reporters at the time that the company believes bitcoin could be more a “more ubiquitous currency in the future.”