PayPal Inc. today launched a new service that will allow users to buy, hold and sell cryptocurrency directly from their existing PayPal accounts.

The service will initially provide support for bitcoin, Ethereum, Bitcoin Cash and Litecoin and will be available to PayPal users in the U.S. in the coming weeks. Cryptocurrency support for Venmo, PayPal’s mobile payment service, and select international markets are planned for the first half of 2021.

Support for cryptocurrency also extends to merchant transactions. Sellers will be able to accept cryptocurrency payments, while users can also tap their crypto balances to make purchases.

“The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” Dan Schulman, president and chief executive officer of PayPal, said in a statement. “Our global reach, digital payments expertise, two-sided network and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange.”

Offering cryptocurrency support isn’t as simple as a company saying it intends to do so with regulatory approval required. In that regard, the announcement doesn’t disappoint: PayPal obtained a “first-of-its-kind” conditional BitLicense from the New York State Department of Financial Services.

New York launched its BitLicense licensing regime in 2015 to some initial pushback, but it has since been embraced by companies operating in the cryptocurrency space. A BitLicense gives regulatory approval to companies operating in New York State that perform virtual currency exchange services.

The conditional BitLicense in this case was granted to PayPal in partnership with Paxos Trust Company LLC, which is providing the cryptocurrency trading and custodial services to PayPal and its users.

The announcement is the first time PayPal will directly offer cryptocurrency services to its users, but it’s not the first time it has dabbled in virtual currency. PayPal was an initial member of Facebook Inc.’s Libra Association and the first company to withdraw from it in October 2019.

Investors liked the news. On a day the Nasdaq Composite dropped 0.3%, PayPal shares rose 5.5%, to $213.07, their highest-ever closing share price to date. Its previous high close was $210.82 on Sept. 2.

Photo: PayPal