- PayPal lets U.S. users send Bitcoin, Ether, and PYUSD across Venmo and crypto wallets.
- Transfer between friends and family crypto is tax-free and not subject to IRS 1099-K rules of reporting.
- New PayPal Links feature enables simple, one-time crypto transfers via text, email or chat.
PayPal has announced an expansion of its peer-to-peer (P2P) payments service, adding support for cryptocurrency transfers in the United States. The update will enable users to transfer Bitcoin, Ethereum, PayPal’s dollar-backed stablecoin PYUSD, and other supported digital assets, across PayPal, Venmo, and an expanding list of crypto-compatible wallets.
Cryptocurrency transfers in PayPal peer-to-peer payments
According to the company’s press release issued on Monday, the new feature is a key step in introducing digital assets in everyday payment systems. U.S. users will soon be able to transfer Bitcoin, Ether, PYUSD, and other tokens directly within the its app. The funds can also be transferred to Venmo users or external wallets that support crypto.
This rollout follows the company’s previous efforts in the field of digital currency, such as a merchant-focused “Pay with Crypto” service and other crypto offerings via Venmo. By integrating cryptocurrencies in P2P transactions, the company aims to make it easier to transfer digital assets and to move beyond investment use cases.
The company also said that friends and family crypto transfers will not be subject to IRS 1099-K tax reporting requirements. Gifts, reimbursements or shared expenses made using the platform or Venmo will continue to be exempt, so personal transfers are not subject to more tax forms.
PayPal Links launches for simple peer-to-peer crypto transfers
In addition to the crypto integration, the company also launched a new product, PayPal Links, which allows users to design their own, one-time links so they can send or request money. These connections may be distributed through text messages, email, or chat, and payments may be incorporated into daily conversations. The links are private and single-use with a time limit of ten days.
The company also said that the feature is available in the U.S. beginning this week, with international expansion to the United Kingdom, Italy, and other regions to take place later this year. Diego Scotti, General Manager of PayPal’s Consumer Group, stressed the firm’s desire to ensure money movement is as seamless across digital platforms as possible, saying the company wants to be present “wherever people are having conversations.”
PayPal Links were introduced as part of PayPal World, the company’s interoperability project to connect wallets and payment systems around the world. This strategy seeks to improve user experience and further adoption of the company’s services.
Also Read: PayPal World Unveiled: Cross-Border Payments Made Easy with Venmo
PYUSD stablecoin boosts peer-to-peer crypto payments
The firm’s stablecoin, PayPal USD, or PYUSD, plays a central role in the new system, which Paxos Trust Company issues. Fully backed by reserves in cash and U.S. Treasuries, PYUSD has achieved a market cap of almost $1.3 billion, according to data from CoinMarketCap.
The firm stressed that peer-to-peer payments continue to form the foundation of its operations. Consumer payment volume improved by 10% in the second quarter compared to the prior year. In addition, Venmo reported its fastest growth in three years. By adopting digital assets and stablecoins, the company aims to develop its status in the changing global payment landscape.
The growth comes in the face of growing competition, with companies such as Kraken and Ripple offering their own crypto payment systems. Still, PayPal’s 400 million-plus active accounts make it a key player in the push for digital currencies to be adopted for everyday use.
Also Read: Ripple Unleashes XRP Ledger MPT to Transform $5 Trillion Trade Finance Gap
