The recent news of PayPal officially entering the cryptocurrency market has generated significant attention. This move highlights a growing trend of major financial service providers integrating digital assets into their offerings. While PayPal is a notable newcomer, other established platforms have been supporting cryptocurrency transactions for some time. This article explores key players in this space, comparing their features, limitations, and overall approach to cryptocurrency services.
We’ll examine whether these platforms allow users to hold their private keys—a critical aspect often summarized by the phrase, “not your keys, not your coins.” Additionally, we’ll review the possibilities for transferring assets outside the platform’s ecosystem, such as sending crypto to external wallets or interacting with blockchain-based applications.
Although these services share similarities in their product offerings, important differences exist in terms of flexibility, security, and user control. Only one of the four platforms discussed allows limited withdrawals to external wallets, and all currently operate under a model where users do not have direct access to their private keys.
Let’s dive into the details of each service.
PayPal
PayPal, a global payment giant, is the newest entrant in the cryptocurrency market. It recently announced that users in the U.S. can buy, sell, and hold Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC) directly through their accounts.
- Users own the cryptocurrencies they purchase on PayPal but do not hold private keys. PayPal states that providing private keys involves significant risks, such as loss, theft, or misplacement.
- Currently, cryptocurrencies bought on PayPal must remain within the user’s account.
- Transfers to other PayPal accounts are not supported.
- Cryptocurrencies cannot yet be used for payments or peer-to-peer (P2P) transfers via PayPal.
- While there are plans to expand functionality, crypto balances cannot currently fund merchant payments or P2P transactions. All holdings must be converted to U.S. dollars before use.
- The weekly purchase limit is $10,000 per account, with an annual cap of $50,000.
- Cryptocurrency purchases are protected against unauthorized activities, even though crypto transactions are generally irreversible.
Revolut
Revolut, a London-based online payment service, updated its terms earlier this year to adopt a more crypto-friendly approach. However, the platform still has limitations regarding user control and external transfers.
- Revolut acts as a custodian, holding cryptocurrencies on behalf of users through third-party providers. Users retain financial ownership but not direct control.
- Private keys are managed by designated third-party custodians, not users.
- Cryptocurrencies can be bought, sold, and held within the app, including BTC, BCH, ETH, LTC, XRP, and XLM.
- Transfers are only possible to other Revolut accounts, not to external wallets.
- Revolut may impose purchase limits and uses a combination of multi-signature wallets and cold storage for security.
- The service is available to residents of the EEA, Australia, Canada, Singapore, Switzerland, Japan, and the U.S., with plans to expand.
Square
Square, led by Bitcoin advocate and Twitter CEO Jack Dorsey, has long been a supporter of cryptocurrency. The company recently invested $50 million in BTC, underscoring its commitment to digital assets.
- Square functions as a custodian for Bitcoin, with users bearing the associated risks.
- BTC is stored using a combination of hot and cold wallets.
- Through its Cash App, users can purchase Bitcoin with a weekly limit of $10,000.
- Withdrawals to external wallets are permitted but require internal review and identity verification.
- A minimum balance of 0.0001 BTC is required for withdrawals, which typically take 30–40 minutes.
- Square reported $875 million in Bitcoin revenue in Q2 2020, a 600% year-over-year increase.
Robinhood
Robinhood, a popular trading platform, allows users to trade cryptocurrencies alongside stocks. Its user-friendly interface has attracted a new generation of investors to crypto markets.
- Users own the cryptocurrencies in their Robinhood accounts and can buy or sell them at any time.
- However, the platform does not provide access to wallet addresses or private keys.
- Assets are stored in a mix of hot and cold wallets, with the majority in cold storage.
- Transfers into or out of Robinhood are not currently supported, though the company is evaluating future options.
- Available cryptocurrencies include BTC, BCH, ETH, LTC, BSV, ETC, and DOGE, with market data for 10 others.
- The service is available to residents of most U.S. states.
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Frequently Asked Questions
Can I transfer cryptocurrencies from these platforms to external wallets?
Most platforms discussed do not support external transfers. Square is the only one that allows limited withdrawals, while PayPal, Revolut, and Robinhood currently restrict transfers to within their ecosystems.
Why don’t these services provide private keys?
Companies cite security concerns, such as the risk of users losing or misplacing keys. By acting as custodians, they aim to reduce these risks and simplify the user experience.
Are there purchase limits on these platforms?
Yes, most services impose limits. For example, PayPal allows up to $10,000 in weekly purchases, while Revolut and Square also have restrictions based on account status and region.
Is my cryptocurrency insured on these platforms?
Protection varies. PayPal covers unauthorized transactions, while Revolut and Square outline specific security measures but may not offer full insurance. Users should review each platform’s terms for details.
Which platforms support the most cryptocurrencies?
Robinhood and Revolut offer a wider selection, including altcoins like XRP and DOGE, while PayPal and Square focus on major assets like BTC and ETH.
Can I use these services outside the United States?
Availability varies. Revolut serves multiple countries, including those in the EEA and Asia, while PayPal and Square are primarily U.S.-focused. Robinhood is limited to U.S. residents.
Conclusion
The entry of major financial platforms into the cryptocurrency space is a positive step toward mainstream adoption. However, users should be aware of the trade-offs involved, particularly regarding control and flexibility. While services like PayPal, Square, Revolut, and Robinhood offer convenience, they also limit access to private keys and external transfers.
As the industry evolves, these platforms may introduce more features to enhance user autonomy. For now, those seeking full control over their digital assets might consider additional tools and services. 👉 Learn more about advanced crypto strategies