From OKEx Scandal to Litecoin, Cryptos Gain as PayPal Joins Market

The dip seen in Bitcoin price last week after a top member of OKEx, one of China’s top three cryptocurrency, was reportedly held in police custody has been made up for by the announcement that global payment giant, PayPal will start allowing the buying and selling of cryptocurrencies on its network.

The price of the top cryptocurrency dropped by 3% in about half an hour – from $11,514 to $11,190 – following the team’s notification that one of their private key holders has been cooperating with a public security bureau in investigations last week. It has since grown by about 15% as at Wednesday Oct. 21 to climb above $13,000 when PayPal made the announcement known as part of its plans to “significantly increase cryptocurrency’s utility by making it available as a funding source for purchases at its 26 million merchants worldwide” with over 350 million users.

Though the OKEx P2P platform has resumed trading on Wednesday Oct. 21 for CNY, INR and VND fiat pairs, and the Buy Crypto fiat gateway reactivated at the same time, cryptocurrency withdrawals are still temporarily suspended on the platform as it has been since Oct. 16 while other operations are running. It’s been suggested that the suspension of direct withdrawal of crypto on the platform may not be related to money laundering claims but rather a personal issue.

The shift to digital forms of currencies is inevitable, bringing with it clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly, PayPal CEO, Dan Schulman, said in the news release.

He added that they are eager to work with central banks and regulators around the world with the offer of their global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls in contributing “to shaping the role that digital currencies will play in the future of global finance and commerce.”

Also in the gain as the U.S. digital payments company joins the market to increase consumer understanding and adoption of cryptocurrency is Litecoin. Like Bitcoin, the Charlie Lee-led cryptocurency saw more than 11% rise to $52.64 – a level last seen on Sept. 3 – shortly after the PayPal news broke. Litecoin makes the list of the first four cryptocurrencies to be available to ‘PayPal account holders in the US in the coming weeks’ alongside Bitcoin, Ethereum and Bitcoin Cash.

Some of its enthusiasts think it is hugely significant that Litecoin made it to the first batch of coins to be featured by the company as it seeks to solidify its position as the best crytocurrency for payment. The issue of high transaction fees has been topical within the crypto space especially as it affects transfers on Bitcoin and Ethereum networks thus questioning their validity to be used as currencies. It is believed that Litecoin presenting itself as a well-positioned payment coin will increase its usage for mini transactions almost on a daily basis. This premise will be bolstered by the planned introduction of a privacy feature on the network by 2021.

Relatedly, with a report claiming that not many first users were impressed by the experimental $1.5 mln digital yuan giveaway but would prefer sticking to payment services from the likes of AliPay and WeChatPay, PayPal’s entry into the crypto market may lead to trigger alternative discussions on the matter of additional roles for the payment companies within the Chinese economic circle in the medium and long terms.

Publication date: 
10/22/2020 - 09:11
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