BTC and ETH account for the vast majority of PayPal's crypto holdings, which amount to $291 million and $250 million, respectively
Bitcoin accounted for the lion's share of PayPal's crypto holdings, totalling $291 million
Global payment giant PayPal has made a significant investment in cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), offering these assets to its customers. PayPal owned a total of $604 million in various cryptocurrencies as of December 31, according to the annual report submitted to the US Securities and Exchange Commission on February 10.
Bitcoin accounted for the largest share of PayPal’s crypto assets, amounting to $291 million, while ETH held $250 million. The remaining $63 million was comprised of Litecoin and Bitcoin Cash.
These crypto holdings account for 67% of PayPal’s total financial liabilities, which amounted to $902 million as of Dec. 31. The overall value of PayPal's financial assets was above $25 billion. It's noteworthy that this is the first year that PayPal has broken down its cryptocurrency holdings in its annual financial report.
In the filing, PayPal acknowledged the unique risks associated with cryptocurrencies, such as technological, legal, and regulatory risks, and recognized a crypto asset safeguarding liability to reflect its obligation to protect the cryptocurrency assets that are kept for the benefit of its clients.
According to the company's petition, PayPal uses a third-party custodian to keep clients' cryptocurrency. PayPal stressed that the custodian is obligated by contract to keep client assets separate from proprietary or other assets, adding:
"We cannot promise that these legal requirements, even followed to the letter by the custodian, will be successful in avoiding such assets from being considered a part of the custodian's estate under bankruptcy or other insolvency law."
As previously mentioned, in November 2020 PayPal will introduce its "Hold and Sell" service for Bitcoin in the United States.The company has been actively pursuing the integration of blockchain and cryptocurrency into its services, including central bank digital currencies, according to Vice President Richard Nash. This move is part of PayPal's larger mission to make digital payments more accessible and secure for its users.