Payments giant PayPal updated its terms of service shortly after the launch of dollar-backed stablecoin PayPal USD (PYUSD) and introduced the Cryptocurrencies Hub – a feature that allows users to hold Bitcoin (BTC) and cryptocurrencies in their PayPal account and with them to interact with them.
The current PayPal terms and conditions describe in detail the requirements for crypto users who are interested in using the platform for crypto currencies. The Cryptocurrencies Hub is vital for PayPal to reinvent itself as a crypto-integrative platform. According to the company, the service will allow selling and buying cryptocurrencies. In addition, paying for purchases through PayPal with the money saved after selling cryptocurrencies is made easier.
PayPal Cryptocurrenies Hub as explained in the Terms and Conditions. Source: PayPal
The Cryptocurrencies Hub will also be crucial for converting between PYUSD and other crypto assets. PayPal further clarified:
“Each balance in your cryptocurrency hub constitutes your ownership of the amount of each crypto asset displayed. You will not hold the digital crypto assets themselves in your crypto asset balance.”
However, not all PayPal users will be able to take advantage of the new feature, as the company decides on person-to-person access. To qualify for the Cryptocurrencies Hub, a PayPal user must first have “a personal PayPal account and a credit account in good standing.” In addition, PayPal also verifies the required identifying information – including name, address, date of birth and tax identification number – provided by users:
“You can only use your Cryptocurrencies Hub as part of your balance account by accessing it through your personal PayPal account. If you are a Hawaii resident, we do not currently allow you to set up a cryptocurrency hub.”
Once the feature is rolled out, the Cryptocurrencies Hub will be linked directly to users’ PayPal account and can be accessed using existing credentials.
Related: PayPal’s crypto holdings surged 56% to nearly $1 billion in the first quarter of 2023
The launch of PayPal USD divided the crypto community as conflicting speculation about its impact on crypto took center stage.
This is the Ethereum contract address for PayPal’s stablecoin.
I can’t believe I’m allowed to tweet this.
We’ve come this far. pic.twitter.com/S6kSqcV4ut
— RYAN SΞAN ADAMS — rsa.eth (@RyanSAdams) August 7, 2023
While many envision PYUSD accelerating mainstream adoption of Ether (ETH), it could also pose problems for decentralization and personal control of assets, the community warns. Several smart contract reviewers highlighted that the PYUSD smart contract includes the “Freezefunds” and “Wipefrozenfunds” features, which they say are textbook examples of centralization attack vectors in Solidity contracts.
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