American entrepreneur and CEO of MicroStrategy, Michael Saylor, has vetoed the recent crypto payment method introduced by PayPal, highlighting major blemishes in the background.
Taking to Twitter, the business executive and co-founder of America-based establishment MicroStrategy suggested a more favorable approach to finance holdings and payment options devoid of the apparent shortcomings in PayPal’s method; such flaws as extra charges resulting from additional taxation, and having to sell one’s digital asset [because users’ cryptocurrency would first be converted to fiat before the payment can be completed].
However seamless the conversion will be, PayPal has noted that extra taxes will be incurred.
Saylor, proposing a better approach, tweeted, “The ideal mobile wallet will eventually let you pay merchants in USD/EUR funded by a low interest credit line secured by your BTC assets. If BTC collateral falls below threshold, switch to an unsecured credit line at a higher rate. Ergo, no need to sell your #Bitcoin& incur taxes.”
His idea seemed to have caught the attention of the public with most people reacting favorably to it as noticed in the comments within the thread.
A few notable comments were from Kraken’s head of growth, Dan Held who replied, “No one wants to sell their Bitcoin”; Co-founder of Blockstack and Pakistani computer scientist noted, “Yep, Bitcoin is for settlement and collateral, not for selling.”
Samson Mow, Chief Strategy Officer at Blockstream, replying to Saylor, tweeted, “Let’s collab on this”.
Now, while we cannot yet envision a future where this is materialized since no firm has officially decided to take it up, it is ultimately likely to appeal to the crypto community as well as put PayPal on its toes should other competitors in the field jump on it.
PayPal recently announced that it will now allow users “checkout with Crypto” across millions of its merchants. Digital assets that can be considered as possible options of payment are Bitcoin, Ether, Litecoin, and Bitcoin Cash.
In practice, when a user wishes to make a payment to any merchant connected to PayPal, they will see the option of paying with Crypto. But prior to the completion of payment, a taxable conversion will be made from cryptocurrency to fiat. Hence, merchants will be receiving fiat.
PayPal also noted that cryptocurrencies held cannot be directly withdrawn to personal wallets nor sent to friends.
Besides Michael Saylor, PayPal’s move was met with objection from most of the crypto community and this is because a lot of people do not want to sell their digital assets, especially not via a taxable transaction.
PayPal would not be the only payment platform to support the use of cryptocurrency as a fellow payment gateway and PayPal’s competitor Square already added support for Bitcoin on its Cash App two years back, and so far, with proper policies, too.
The payment platform has not made any follow-up comment on this shortcoming highlighted by Michael Saylor and a host of others, and whether they will improve on it or not is left to be seen.