Bitcoin remains a hot topic at the moment, with new companies jumping on the cryptocurrency train to attract new customers to their platforms or products.
One of the companies to announce support for Bitcoin is PayPal. The online payment service introduced a new cryptocurrency service in October 2020 allowing its US-based users to buy, sell, and hold Bitcoin, Bitcoin Cash, Litecoin, and Ethereum.
However, there are some caveats to PayPal's cryptocurrency support.
Can I withdraw or transfer Bitcoin from Paypal?
To put it simply, no.
PayPal does not currently allow its users to transfer Bitcoin to different wallets.
This might be news to some holders, especially if you didn't read the Terms & Conditions for PayPal's Cryptocurrency service.
The T&C's state:
You currently are NOT able to send Crypto Assets to family or friends, or withdraw Crypto Assets from your Cryptocurrencies Hub to an external cryptocurrency wallet. You also CANNOT use Crypto Assets directly as currency to pay for goods or services. If you want to withdraw the value from your Cryptocurrencies Hub you will need to sell your Crypto Assets and withdraw the cash proceeds from their sale or use those cash proceeds to pay for purchases.
Essentially, this means cryptocurrency on the PayPal platform is simply an investment; you can only buy and sell Bitcoin, with PayPal holding the keys to all your cryptocurrency assets. PayPal isn't alone in doing this, with Robinhood also not allowing its users to transfer Bitcoin. Indeed, some crypto enthusiasts go as far as claiming you don't truly 'own' the cryptocurrency in these situations.
Of course, there are a few benefits to this system, one being that you won't be at risk of losing your Bitcoin keys.
Speaking to CNBC, Asheesh Birla, a general manager at Ripple, compared the setup to depositing money into a bank. "You're trusting that Bank of America actually has your U.S. dollars in their bank accounts, and they're giving you an IOU."
Well, this really leaves you with two options: Either leave your Bitcoin in your PayPal account, or sell the cryptocurrency and re-purchase it elsewhere.
If you're wanting to use Bitcoin to pay for something, you'll instead need to buy the cryptocurrency through another platform, such as Coinbase, Binance or CashApp.
There is a chance that PayPal could eventually permit its users to withdraw or transfer crypto assets to other wallets. Robinhood, for example, states it is "currently working on providing the ability to deposit and withdraw supported cryptocurrencies". However, there is no guarantee PayPal will offer the same service.
For more articles like this, take a look at our Planet Crypto page.