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PayPal Will Allow Bitcoin as Payment for Goods at 29 Million Merchants

PayPal unveils what could be the biggest push yet to bring cryptocurrencies into the payments system for everyday purchases.

PayPal Inc  (PYPL)  said Tuesday that it will offer customers the ability to buy goods and services with cryptocurrencies at more than 29 million merchants around the world in what may be the biggest single effort to normalize digital purchases.

PayPal customers with a digital 'wallet' will be able to convert their cryptocurrencies -- including bitcoin, litecoin and either -- into fiat currency at the point of purchase, allowing for what it calls a more seamless transaction process. 

Last year, PayPal unveiled plans to allow users to buy and sell cryptocurrencies on its payment platform in a move it hoped would "meaningfully contribute to shaping the role that digital currencies will play in the future of global finance and commerce."

"As the use of digital payments and digital currencies accelerates, the introduction of Checkout with Crypto continues our focus on driving mainstream adoption of cryptocurrencies, while continuing to offer PayPal customers choice and flexibility in the ways they can pay using the PayPal wallet," said CEO Dan Schulman. "Enabling cryptocurrencies to make purchases at businesses around the world is the next chapter in driving the ubiquity and mass acceptance of digital currencies."  

PayPal shares were marked 1.1% higher in pre-market trading following news of the new cryptocurrency purchase feature, indicating an opening bell price of $238.30 each. Bitcoin prices were marked 2.5% higher on the session at $59,091.90 each, extending their year-to-date gain to around 101%.

Bitcoin's use in goods and services transactions remains remarkably small, however, with a 2018 study suggesting monthly volumes of less than $60 million. 

The heavy environmental cost of bitcoin's complicated settlement procedure is also a factor in its slow transaction processing speed, a recent study from Bank of America noted, with just 14,000 transactions per hour. Visa  (V) , by contrast, processes more than 236 million each hour.