PayPal opened cryptocurrency access to U.S. business accounts

PayPal Holdings said on September 25, 2024 that it was enabling eligible U.S. merchants to buy, hold and sell cryptocurrency directly from PayPal business accounts. The company also said those accounts could send and receive supported tokens between PayPal and eligible external blockchain addresses. The service was not available to business accounts in New York State at launch.

The verified development was narrower than a general announcement that every merchant could accept cryptocurrency from customers. It added crypto dealing, custody access and on-chain transfer functions to business accounts. PayPal’s release did not announce a new crypto checkout product or say that ordinary merchant settlements would move onto a blockchain.

Why the business-account shift mattered

The institutional significance was distribution. PayPal had already put cryptocurrency functions in front of consumers, but extending them to businesses moved digital assets into an account type used for treasury, payments and operating activity. An external-transfer option also made the product more than a closed price-exposure feature: eligible merchants could move supported assets to or from third-party wallets.

PayPal described the addressable group only as millions of U.S. merchants. Its latest annual filing available on September 25, 2024 supplied broader scale, not a count of eligible users. PayPal reported 35 million merchant active accounts worldwide and 426 million total active accounts as of December 31, 2023. For the year ended December 31, 2023, it reported 25.0 billion payment transactions and $1.53 trillion in total payment volume.

Those figures should not be read as adoption forecasts. They covered PayPal’s global platform, while the new feature was for eligible U.S. business accounts and excluded New York at launch. PayPal also defined an active account as one that completed a transaction during the preceding 12 months, excluded gateway-only activity, and warned that one user may hold multiple accounts. The numbers establish network scale, not how many businesses could or would use cryptocurrency.

From consumer access to merchant treasury

The September 25 expansion followed a sequence PayPal itself identified. It introduced buy, hold and sell functions for consumers in 2020 and launched PayPal USD, or PYUSD, on August 7, 2023. PYUSD was issued by Paxos Trust Company and designed to be redeemable one-for-one for U.S. dollars, backed by dollar deposits, short-term U.S. Treasury instruments and similar cash equivalents. By September 25, 2024, PayPal also pointed to PYUSD’s availability on Ethereum and Solana as part of its effort to connect its payment network with public blockchains.

For merchants, the practical change was account-side optionality. A business could acquire a supported asset inside PayPal, retain it there, sell it, or transfer it on-chain if eligible. That could reduce the operational friction of opening a separate consumer account or using an unrelated exchange. It did not eliminate volatility, tax, compliance, custody or blockchain-transfer risks, and PayPal did not quantify cost savings.

Custody and unanswered questions

PayPal’s 2023 annual filing clarifies the custody model that framed the announcement. The company said licensed third-party trust companies held customer crypto assets in custodial accounts in PayPal’s name for customers’ benefit, while PayPal maintained internal ownership records. It treated itself as an agent for accounting purposes and recorded safeguarding assets and liabilities. External withdrawal capability therefore increased portability, but it did not turn the PayPal account into a self-custodied wallet.

The September 25 release did not enumerate the supported tokens, publish transaction limits or fees, disclose eligibility criteria, provide a New York timetable, or report merchant demand beyond an executive’s statement that business owners had requested consumer-like capabilities. It also supplied no usage data and no attributable market-price reaction. The defensible conclusion for September 25, 2024 is consequently limited but meaningful: a major regulated payments platform opened crypto account and blockchain-transfer functions to part of its U.S. merchant base, widening institutional access without demonstrating adoption or market impact.