Representatives of a major payments platform have found a way to draw users’ attention to cryptocurrencies. But how?
The day before, a special clause appeared in PayPal’s terms of use: it appeared that the payment system had allegedly introduced a $2,500 fine for misinformation on the part of users. A little later it turned out that this event was allegedly “misinformation”, because PayPal had removed the mention of the rule. However, even that was enough to cause a storm of emotions in the cryptocurrency community. Here’s a closer look at what’s going on.
It should be noted that PayPal was one of the catalysts for the previous bullrun in the cryptocurrency market. The fact is that in October 2020, the payment platform integrated Bitcoin, Etherium and two other cryptocurrencies, meaning it allowed users to buy, sell and store them.
PayPal payment platform supports cryptocurrencies
In the spring of 2021, the payment giant also announced a desire to allow users to pay with crypto for goods and services, which should further boost the popularity of digital assets.
Funny enough, though, it wasn't until June 2022, at the height of the bearish trend, that cryptocurrency withdrawals to third-party wallets appeared on the platform. Initially, coin aficionados actively criticised PayPal's platform for not having this feature, as users were essentially locked inside the company's ecosystem, which goes against the ideals of digital decentralised assets.
Now PayPal not only supports the withdrawal of crypto, but also reminds users of the benefits of full-fledged coins through its actions.
Why people choose cryptocurrencies
The new rule was due to take effect on 3 November, but due to harsh criticism from users of the platform PayPal quickly changed its rhetoric. The company’s spokesperson then issued the following statement.
A recent update to the platform’s terms of use had been issued by mistake and contained incorrect information. PayPal does not penalise people for misinformation, and this wording should never have been included in our policy. Our experts are working on correcting our policy pages. We apologize for the confusion that occurred.
In other words, users could have been fined if they provided incorrect data. As we have already mentioned, this amount was supposed to be charged directly from people's accounts, which was another cause for outrage.
Penalty line in the platform’s usage rules
When word of the new rule quickly spread on Twitter, former PayPal president David Marcus called the company’s strategy “insane” in one of his tweets. The reaction is understandable, as the aforementioned $2,500 fine could allegedly be taken directly from a user’s account by PayPal, and the amount turned out to be quite serious.
According to Cointelegraph’s sources, other commentators saw the ban as blatant censorship and even an attempt to block transactions by its users. Maple Finance co-founder Sid Powell said the incident was clear proof that people need to have full control over their own funds. Here’s his rejoinder.
PayPal is a good example of why you need to have full control over your own funds. It used to be that your finances were separate from your freedom of speech. Now keeping your own money is the only way to protect that right for yourself.
PayPal and Bitcoin
Cryptocurrencies, whose networks are decentralised and not dependent on certain people and companies, are able to help. By storing crypto on a separate wallet that is independent of any centralised platform, the value of digital assets cannot be subjected to control or any other form of censorship by governments or large companies.
There is an exception to this situation: for example, issuers of popular staplecoins like USDT or USDC can block certain addresses from interacting with their coins, essentially shutting down access to the cryptocurrency in question remotely. This happened in August, when Circle, the issuer of the USDC coin, undertook to block addresses that had previously interacted with the sanctioned cryptomixer Tornado Cash. As a result, such people were unable to manage their own crypto-assets.
However, it is important to understand that such situations are quite rare, and the USDT issuer called Tether has not carried out similar blockchains. Finally, it is unlikely to wait for such sanctions against a certain person, which means that hardware wallets like the already familiar Ledger Nano S Plus are perfect for storing coins. And the prospect of being blocked in this case only applies to stalecoins.
Ledger Nano S Plus Genesis Edition hardware wallet
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The influx of funds into digital assets broke a new record in Brazil the day before, with the number of local companies that hold cryptocurrencies on their balance sheets hitting a new all-time high. According to Brazil’s Federal Revenue Secretariat, 12,053 Brazilian firms reflected cryptocurrencies in their own wallets in August this year.
The figure is up 6.1 per cent compared to July. Admittedly, there is also a negative trend in the country – the number of individual cryptocurrency holders has dropped significantly in recent months. This is most likely due to the prolonged fall in the price of Bitcoin, but overall the situation is quite favourable given the current bearish trend.
We believe that in this case the platform got away with little bloodshed, as it essentially cancelled the plan to integrate such a penalty system altogether. However, such actions in any case make one wonder about the feasibility of keeping their coins from centralised companies. Obviously, decentralised alternatives like the same Bitcoin are much better, despite their volatility. So now PayPal users, along with other centralised venues, have a serious reason to start interacting with crypto.
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