Paypal to Support Ethereum and Bitcoin
Posted4 months agoActive3 months ago
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Paypal
Cryptocurrency
Financial Regulation
PayPal announced support for Ethereum and Bitcoin, sparking controversy and skepticism among HN users about the company's intentions and the implications for cryptocurrency adoption.
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I could create an account, buy a domain name with a gift card, and put your username in the WHOIS.
https://www.attejuvonen.fi/paypal-sends-phishing-emails/
You don't need Paypal to use Bitcoin, but there's nothing in the spec that prohibits it.
The same is true of cryptocurrency. It's not a problem that centralized service providers exist. If they stop providing useful services, people can just take their cryptocurrency and go home.
Coinbase's spread isn't the worst thing to pay for the service of having a debit card and auto-selling, but if you also buy crypto using Coinbase, they double-dip on the fee.
I used to work at a few big banks, and because of the "friendly" nature of digital currencies. The traditional banking entities are trying to get in on the grift while they can.
In practice, the word "decentralized" just speaks to whether anyone can join in the protocol if they want. But it doesn't mean the protocol is easy to implement.
The reality is, we will have a mix of custodian - through third-party - and self-sovereign usage; depending on the context and user's skill
> Under capitalism necessities become luxuries, while luxuries become false necessities. Umair Haque
The benefit comes from having the option to go elsewhere. A business that cannot lock you in is more likely to try to retain your custom by offering a good service.
There are sites that still support Visa / Mastercard but removed their Paypal support. SubscribeStar, for example.
Of course it will be as far from "anyone" or "anywhere" as possible, because they will start the crypto expansion in a much more restrictive fashion than TradFi.
congrats if you buy a stablecoin - you've effectively financed the US gvt at 0%.
now the US gvt can inflate away that debt at 0 cost to them, and pass on the cost to you.
that's why a bunch of these stablecoin companies are pushing it as a way to save for people in distressed economies.
what a way to steal from the poor.
that's why the crypto act was called GENIUS act.
Just Devil's Advocate, but isn't that a reason not to use stablecoins? I mean, I can participate in the fleecing of the poor without changing anything at all apparently.
I don't know what the effect is called, but suddenly some unrest in some country or inflation in another calls for creating a whole new money system. It seems unreasonable and I'm a bit suspicious of where it comes from.
IIRC in hindsight at the beginning of 2024 the best was to exchange all your saved dollars to pesos, invest them in bonds or the bank, and exchange them for dollars at the end of the year. Probably you can get a 20% yoy increase. But there was a risk or many unexpected problems that would let you with a lot of monopoly money that is worth only a 50% of the initial value... So the safe option was to keep your savings in dollars.
Euros are another safe option. Pounds are very difficult to exchange. The money of nearby countries is sometimes better, but they may have unexpected surprises too.
> I don't know what the effect is called, but suddenly some unrest in some country or inflation in another calls for creating a whole new money system. It seems unreasonable and I'm a bit suspicious of where it comes from.
I agree.
sure, it couldn't happen without the local warlords, but still...
By swapping the volatility from crypto to lower USD volatility, they effectively create a funnel from riskier currencies into dollars.
Which is the same state that previously existed... except now facilitated by the crypto industry's global accessibility/UX and with less international regulation.
Blessing USD stablecoins at the US federal level was a smart move (from the US-perspective) as it creates a much bigger demand for dollars, and if the US didn't do it then China or OPEC would have eventually gotten around to it as an end-run around dollar hegemony.
Winners:
Losers: TBD:These typically pay interest. (Or have retail servicing costs attached.)
[1] https://www.chase.com/personal/savings/interest-savings/inte...
[2] https://www.bankofamerica.com/deposits/savings/savings-accou...
A bunch of zero marginal cost capital funding purchases of U.S. debt would absolutely push down rates, possibly lower than inflation, because if you’re a stablecoin issuer you’re not constrained by yield.
This is a dumb-money venture. And if there is this much money that is this dumb, Treasuries aren’t the worst place for it to go.
If you think trillions of dollars in de novo price-insensitive demand doesn’t move a market, even one as deep as the Treasury market, I’ve got a stablecoin to sell you.
There is a floor to short term treasury rates because the Fed also runs overnight repo operations linked to the Fed funds rate
USDC on Coinbase yields interest. The USDC people make a little spread on it, but you aren't financing the US government at 0%, you're financing them at market rates. There is counterparty risk just like with a bank. Unlike a bank, there are liquid markets onchain for other fungibles.
Russia's take on the system is correct and we're seeing ASIANs and BRICS run away as fast as possible from $.
Ways out include total protectionism/mercantilism or war.
Gold is parabolic now. 10k by March is completely doable.
> The GENIUS Act requires permitted payment stablecoin issuers to maintain reserves backing outstanding payment stablecoins on at least a one-to-one basis, and provides that reserves may only consist of certain specified assets, including US dollars, federal reserve notes, funds held at certain insured or regulated depository institutions, certain short-term Treasuries and Treasury-backed reverse repurchase agreements, and money market funds.
> In addition, the GENIUS Act requires stablecoin issuers to provide monthly public reporting as to the composition of their reserve portfolios on their website, and requires larger issuers (with more than $50 billion in consolidated total outstanding issuance) to publish annual audited financial statements. These monthly reports must be examined by a registered public accounting firm, and the CEO and CFO of a permitted payment stablecoin issuer must certify the accuracy of these reports to the primary federal payment stablecoin regulator or state payment stablecoin regulator, as applicable.
https://www.lw.com/en/insights/the-genius-act-of-2025-stable...
If another goal is to enrich the Trump family, then the SEC could forgo enforcement on the World Liberty Financial stablecoin. But they could still enforce the act for everyone else.
Increasing demand for treasuries, thus keeping interest rates down, also directly benefits Trump because he's bought at least $100 million in bonds since becoming president.
https://www.yahoo.com/news/articles/trump-buys-more-100-mill...
Stablecoin issuers earn yield from holding U.S. Treasuries, which sustains their business model. Meanwhile, people in distressed economies get practical access to a digital dollar, often cheaper and faster than navigating restrictive exchange rules or paying steep conversion fees at money-changers. That’s meaningful when local currencies are unstable or losing value.
Of course, not all stablecoin issuers are trustworthy, and some governments under economic distress may ban or limit these instruments. But when the setup works, both sides benefit.
Every country is different, but poor countries are mostly poor because they are governed by kleptocrats, generally including their central bankers, and hyperinflation in particular is a constant menace. When the central bankers aren't directly kleptocratic themselves, they are very often incompetent but loyal, similar to most of Trump's nominees. In this situation, generally speaking, things that put power over individuals' lives back in the hands of those individuals, instead of the kleptocrats' hands, will improve the situation not just of the individuals but of their whole country.
For example China, India and Malaysia have grown quite substantially are not particularly transparent, but they are alike in their resistance to dollarization. On the other hand Ecuador and El Salvador are examples of countries that have fully embraced dollarization with less than great outcomes. There are examples in the middle as well, but there is not a clear trend that it's necessarily a change for the better of the country and it's citizens.
To me it seems like a continuation of the IMF's dollarization as described by Joseph Stiglitz in 'Globalization and its discontents', in terms of mechanisms and effects on recipient countries. From this perspective it's less like transferring power from kleptocrats to the people, and more like choosing kleptocrats that are offering a better deal.
I do agree that dollarization hasn't been resoundingly successful, and that does undermine my thesis somewhat. I agree that cryptocurrencies are like super-dollarization: not only do they remove domestic government control of monetary policy, they remove or weaken domestic government control of and visibility into capital flows, banking services such as savings and lending, and payments. If that would be great, you'd expect dollarization to at least be good. And it isn't clear that it has been. It hasn't been obviously disastrous either—you can make credible arguments that Ecuador or El Salvador would be either better off or worse off without it—but it hasn't been obviously beneficial.
I think "choosing kleptocrats that are offering a better deal" is a good description of dollarization and, for example, Tether, USDC, or CBDCs. But, as a description of Bitcoin and Ethereal, it's comprehensively incorrect; there haven't ever been any credible allegations of corruption in their blockchains, unless you count Ethereal's DAO rollback. They've so far been completely immune to the kind of politically-motivated currency manipulation that is the actual official job of central banks behind fiat currencies like the dollar.
As MMT teaches us, a government that issues its own currency does not need to borrow to finance itself, as it can create the money it needs, though it may still issue debt for other reasons.
Further, stable coins / crypto are almost certainly being used to slop up as much liquidity as possible and has essentially so far pulled 4 trillion out of circulation. If not for that sleight of hand trick, hyperinflation, at least in the USA, would have already happened. Probably still will as there's only so much can kicking that can occur. I know of 30 year olds that literally live in mom's basement and dump nearly all of their just above minimum wage checks straight into Robinhood to blindly purchase crypto. Will forever beat inflation is the mentality.
Sure looks like there's going to be lots of pain for poor and middle class people in the next 5 years.
Yes, they are somewhat of a necessary evil if you do any online peer-to-peer buying/selling, since they are the only money transfer service that provides some level of "buyer protection", but you want to do the bare minimum with PayPal to avoid unnecessary risk.
Link one bank account (not your primary) to PayPal to receive money, and transfer received money immediately. Link one credit card for purchases. Nothing else. Do not link debit cards, do not sign up for their "balance account" where money is held in PayPal (no matter how hard they push it with UI dark patterns in their app), do not sign up for their crypto account.
Has this been your experience with PayPal?
That's not even close to the worst stories I've heard... like running Rippa through the ringer.
More specifically, their support cannot actually do anything to resolve problems. They read off what their computer screen is telling them. They can't take any actions to fix things.
Edit: The above means that deposits on your PayPal account aren’t insured, different from regular bank accounts in the EU. This is a frequently emphasized caveat regarding the use of PayPal as a bank account in the EU.
My point is that one doesn’t get all the protections normally taken for granted for EU bank accounts.
https://www.paypal.com/us/legalhub/paypal/program-banks-tnc
What bank allows that on a consumer account?
They are not called Ing Diba anymore.
For anyone curious, the fee is $240/yr.
I used Mercury when I had an LLC and had a great experience. It feels like they're the only bank that's not 10 years behind in technology. I've never tried their personal banking, but the ACH denial power makes me a lot more curious.
And, when the only medium of exchange available to consumers and merchants is through one of these tokenized marketplaces, getting locked out of marketplaces means getting locked out of doing business entirely with no recourse or alternative.
Mediums of exchange should be neutral, and self-sovereign exchange has to be an option in order for marketplaces to offer competitive marketplace services, else they just abuse their monopoly on medium of exchange.
It's pretty nice, e.g. that when I buy a leash, it doesn't also have to walk the dog. Maybe for some, it's ideal to have someone else walk the dog, and the dog walker can even insist on bringing their own leash, but having the option of buying my own leash, putting it on my dog, and walking it myself means I don't need anyone's permission to own a dog, (not a big deal in the case of dog-walkers since there are so many) and substantially lowers the premium that dog-walkers can command in the marketplace for their services.
So while you may want a self-sovereign exchange, your counterparty doesn't give a shit about your preferences, or is actively happy with using PayPal (Because their dispute resolution is better biased towards their side of the transaction, or because they just never gave it a second thought.)
As a counterpoint to the rhetorical impossibility of a challenger overcoming an incumbent (in almost all subjects this is true, despite challengers in the world regularly overcoming incumbents), exchange rates indicate markets are positive about the network effect threshold being overcome, since if it is impossible to overcome, the value of all cryptocurrencies combined is approximately 0.
"Those are functions of a marketplace"
Then it seems you should have said "If only there was a technology and a marketplace which fixes this..."
And no, it doesn't exist because handling disputes is a hard problem. It's the actual moat of PayPal (and credit card companies) and the reason why they can get away with their crappy behaviour.
> No clue what I did, no recourse, now locked out of a fuckton of global marketplaces and peer to peer transactions that uniquely only work on a platform like PayPal.
I am not saying there is a single technology that is completely at parity without paypal without the problems, I'm saying that there is a technology which can give you access to global marketplaces and peer-to-peer transacting if you are locked out of the paypal/CC system.
And the payment processors don't have a moat in their sophistication in dispute resolution. This is a hard problem, but a solvable one if you have lots of liquidity: e.g Amazon, AliExpress. Their moat is having lots of liquidity, regulatory capture, and network effects.
Places like swapd that operate on crypto escrow every transaction to lessen these crypto problems.
s/demonic/pernicious
One thing I did - in response to them saying I could no longer do business, I told them that they also could no longer do business with me, requested a copy of all of the user data they had on me under CCPA, and told them to then delete all of my personal information. They did not actually comply and I didn't pursue. I probably should, though.
Costs 1.5%. Or wait a few days.[1] Plus a fee for receiving cryptocurrency. There are additional fees for buying cryptocurrencies, other than PayPal's own. And none of this is FDIC insured.
[1] https://www.paypal.com/us/legalhub/paypal/pp-balance-tnc?loc...
Mine does supposedly but does not let me, the account holder, use FedNow. Instead I'm stuck using Zelle which I can hit the limits of just by paying a mortgage payment.
Now instant payments using SEPA are mandatory and rolled out everywhere.
All very true, but banks are doing exactly the same thing, all while following banking regulation: https://news.ycombinator.com/item?id=38150606
"In 2008, PayPal Europe was granted a Luxembourg banking license, which, under European Union (EU) law, allows it to conduct banking business throughout the EU.[173] It is therefore regulated as a bank by Luxembourg's banking supervisory authority" https://en.wikipedia.org/wiki/PayPal#Regulation
You're not wrong that they don't act like an honest bank, or abides by any sort of ethics about whose money it really is that they're holding onto... but know that they are regulated in case that ever helps you!
The thing that gets me is the 40% cash back on Walmart purchases up to 500$. It's such an incredible incentive it has to be shady af. Are the Rand oligarchs trying to buy out the poor? We'll never know because poor people don't have PayPal accounts.
"A something-or-another big enough to give you everything you want is a something-or-another big enough to take from you everything you have." -Voltaire
In the US, this is true with some important caveats.
"If you have opened a PayPal Debit Card Mastercard® account, enrolled in Direct Deposit, or bought or received cryptocurrency with your personal PayPal Balance account, we will place your U.S. dollar PayPal Balance funds at one or more Program Banks. Any other balance funds and all cryptocurrencies are not held in FDIC insured bank deposits. Cryptocurrencies may lose value." [1]
[1]: https://www.paypal.com/us/legalhub/paypal/program-banks-tnc
I switched to a hardly used checking account for paypal after they held $20 hostage for a couple months after selling an old video card on ebay. I'd heard some one say their bank account had become frozen by paypal during a dispute and that event reminded me of it enough to get some separation.
Doubly so when the feature being discussed is crypto related.
I agree that it is confusing.
Ideally, companies would have a page "all the domains we use" as part of their footer links.
So many companies that should know better are helping to enable phishing by using random domains.
(also thought that it's phishing or scam domain).
To look at it another way - why one would spend $100 from their brokerage account if they know a year later they can spend $110?
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