PayPal is making it easier for ordinary people to buy cryptocurrency, but it’s not clear that ordinary people will comprehend the risk.
PayPal is letting people buy and sell cryptocurrency within the Venmo app with as little as a dollar, it announced today (April 20). The move comes 3 weeks after PayPal launched Checkout with Crypto, which allows people to use cryptocurrency as a funding method when buying with PayPal.
PayPal said in its announcement:
“With crypto on Venmo, customers can view cryptocurrency trends, buy or sell crypto, and access in-app guides and videos to help answer commonly asked questions and learn more about the world of crypto. Customers using crypto on Venmo can choose from four types of cryptocurrency: Bitcoin, Ethereum, Litecoin and Bitcoin Cash. When they make transactions, customers can also choose to share their crypto journey with their friends through the Venmo feed.”
Crypto on Venmo is enabled through PayPal’s partnership with Paxos Trust Company, a regulated provider of cryptocurrency products and services.
CNBC reported on today’s news, noting that Klarna’s CEO, while a believer in the promise of digital currencies, is “nervous that a lot of people will come late into the party and lose a lot of money.”
Be sure to read all the terms and conditions of the service for details and restrictions; the Venmo Cryptocurrency Terms and Conditions page starts off: “BEFORE YOU START: BUYING AND SELLING CRYPTO ASSETS IS INHERENTLY RISKY.”
Another caveat: the Venmo FAQs page states, “You will need to report gains or losses from the sale of crypto on your taxes.” The IRS states: “Virtual currency transactions are taxable by law just like transactions in any other property. Taxpayers transacting in virtual currency may have to report those transactions on their tax returns.” Read more on the IRS.gov website.
PayPal said Crypto on Venmo is starting to roll out today and will be available for all customers directly in the Venmo app within the next few weeks, here’s a link to the full announcement.