In our previous article on Bitcoins (available at http://www.technology-law-blog.co.uk/2014/03/why-bitcoins-are-hitting-the-headlines.html), we discussed the risks and volatility associated with digital currency. However, Bitcoins could soon have renewed credibility and purpose following PayPal’s announcement that it will be enabling limited Bitcoin payments.
PayPal is being understandably cautious and is not processing Bitcoin payments through its payment hub just yet. Instead, PayPal has entered into agreements with three of the largest Bitcoin payment processors: BitPay; GoCoin; and Coinbase to process payments.
At this stage PayPal will simply be enabling specific retailers to receive payments by Bitcoin, however, PayPal subsidiary ‘Braintree’ recently confirmed that it was working on a way to process such payments. Whilst initially confined to North American sellers of digital goods, if the service is successful, we anticipate a roll out of Bitcoin payments being processed globally by PayPal which will allow online retailers such as eBay to accept payment for goods by Bitcoin.
This is definitely a step forward for supporters of virtual currencies and may lead to safer and more reliable Bitcoin transactions as well as increased support for digital currency from the business community.