The popular fiat-to-crypto platform Coinbase recently announced that it had enabled instant withdrawals from crypto to fiat directly to a customer’s PayPal account for US-based users, opening a new option for moving fiat currency outside of the traditional banking system. And the good news for non-US crypto “hodlers” is that the company plans to roll out the same functionality to a range of new countries in 2019, although the exact details on this are still unknown.
The company claims it operates in 42 countries.
Coinbase initially integrated PayPal withdrawals for US users all the way back in 2016, but the option was later disabled due to technical difficulties.
Why PayPal withdrawals matter
In the past, the only option for making a withdrawal in the US was through a US bank account in the ACH or Federal Wire system. That meant that no matter how much Coinbase’s customers may dislike banks, they still had no option but to use them to realize their fiat profits (or losses).
Of course, users could potentially sell the cryptocurrencies held on Coinbase for cash via a service like LocalBitcoins.com, a peer-to-peer marketplace, but that would require going outside of the Coinbase environment, with the associated risks and potentially worse exchange rate. With PayPal withdrawals now enabled, customers may still not be able to completely circumvent the banking system (since PayPal buys are still not enabled), but the company is getting closer to this new reality.
However, as mentioned above, when buying cryptocurrency, however, PayPal is still not accepted by Coinbase. Instead, customers have the choice between debit and credit cards or standard bank transfers, depending on the country they are based in.
There are still a variety of other exchanges that accept PayPal and similar services for both deposits and withdrawals. Among them are a range of decentralized exchanges and other peer-to-peer marketplaces like LocalBitcoins.com, where PayPal remains a popular payment method.
Meanwhile, Coinbase has also stepped up efforts to make its platform more attractive to cryptocurrency enthusiasts in other ways as of late, listing new assets on its exchange at a pace never seen before in the company’s 6-year history. According to the company, nearly all ERC20 tokens that meet the company’s “Digital Asset Framework” may eventually become listed on the platform.