Transferring Funds From Crypto Wallets To PayPal-How To In 2024

If you are a PayPal user, you can buy, sell, and transfer cryptocurrencies on PayPal.

Do you need clarification on moving your digital currencies smoothly from crypto wallets to PayPal? Are you wondering whether it’s safe and how it works?

You don’t have to overthink anymore.

In this article, I’ll take you through the hassle-free steps to transfer funds from crypto wallets to PayPal and vice versa.

I’ll also explain how to sell and buy crypto on PayPal, cryptocurrency fees, tax forms, and protection policies.

If you’re ready, let’s begin.

Table of Contents

PayPal Crypto Transfer: An Introduction

Paypal is a company that operates online payments in many countries. It’s a fast and safe way to send and receive money.

In 2020, PayPal launched a new service where users can buy, sell, and hold cryptocurrencies through PayPal.

Crypto is a digital currency that is exchanged through computer networks. It doesn’t rely on any central authority, government, or bank to maintain it. If you’re new to crypto, read this article on “how to start investing in cryptocurrency.”

In 2022, Jose Fernandez da Ponte, Senior Vice President and General Manager of Blockchain, Crypto, and Digital Currencies, announced a new feature where users can transfer their crypto assets, such as Bitcoin, Bitcoin Cash, Ethereum, and Litecoin, between Paypal and other wallets and exchanges.

So, with PayPal now you can,

Buy, hold, and sell crypto.
Transfer crypto between eligible Venmo accounts, other wallets, and exchanges.
Transfer crypto between PayPal users.
Receive and send crypto between PayPal accounts within the US and the US territories.
Use crypto to pay for purchases made through the PayPal account.

How can you do these functions?

I’ll explain each one in detail, so keep reading.

Before that, you must sign up for PayPal. You can do it right now for absolutely free.

All you need to do is go to PayPal.com and fill in the information requested. You must fill in your country, first and last name, address, email address, and phone number. Next, download and set up the PayPal app.

YOU’RE SET.

Transferring Crypto From Your PayPal Account To Other Wallets And Exchanges

PayPal supports the transfer of crypto from your PayPal account to other wallets, exchanges, and Venmo accounts.

For this purpose, PayPal introduced a stablecoin called the PYUSD (PayPal USD). Let’s look a bit more into PYUSD.

PYUSD is a US dollar-dominated, easily redeemable, stablecoin cryptocurrency. It’s issued as an ERC-20 token on the Ethereum Blockchain. Hence, it’s compatible with most of the wallets.

PYUSD is 100% backed by US dollar deposits. It means you can redeem PYUSD for US dollars at a 1:1 rate.

Now that you know about PYUSD, I’ll explain the step-by-step process of transferring crypto from your PayPal account to other wallets and exchanges.

Log into your PayPal app.
Go to the finances tab.
Click on crypto balance.
Select your desired cryptocurrency.
Click on the transfers button. It appears as two arrows moving in opposite directions.
Tap send.
Complete the ID verification process. Usually, verification is asked only once per user.
PayPal will request an external crypto address. Manually enter the wallet address, copy and paste it, or scan the QR code by clicking the QR code button at the right of the search box.
Enter the amount you want to send. You can select the amount in crypto or USD. If you enter the amount in USD, PayPal will convert it to the right crypto amount and send it—the dollar value of the sent crypto changes over time. Thus, the recipient might get the same amount or sometimes a little less or more than the sent amount.
Click on Next.
Confirm and tap on the ‘send now’ button.

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Note: Before sending the transaction, double-check the address you typed. Crypto sent to the wrong address will be lost, and you can’t cancel PayPal crypto transfers.

Most wallets accept PYUSD. However, confirm whether your external wallet accepts PYUSD.

Does PayPal charge any network fees for transferring crypto to an external wallet?

A blockchain network fee is charged when crypto is sent to an external wallet address. It’s a network fee and not a PayPal fee. The amount fluctuates with network congestion. You’ll see an estimate of the network fee on the confirmation screen before sending it.

Transferring Crypto From An External Wallet/Exchange To Your PayPal Account

Do you want to transfer crypto from an external wallet to your PayPal? Here’s how you do it.

Log in to PayPal.
Go to the finance tab.
Click on crypto balance.
Choose the type of coin you want to receive from the options given.
Click on the transfers button.
Click on receive.
Complete the ID verification steps. Generally, verification is required only once per user.
Your QR code and a unique address will be generated automatically.
Use this crypto address to send crypto to your PayPal from an external wallet.

A new address is generated for every new crypto transfer. This is done for security purposes, but each new address is permanent and can receive crypto.

Note that the address generated works only for the cryptocurrency you choose and not for others. It doesn’t work like a private key.

Crypto sent to the wrong address will be lost. So, ensure you use the correct address at all times.

Can crypto transfers fail?

Yes, crypto transfers can fail due to the following reasons:

Issues with the cryptocurrency network.
System downside.
Issues with your account.

Remember, PayPal doesn’t own any cryptocurrency networks. So, while transferring cryptocurrency, the transaction will not be shown as complete till the network confirms it.

To accept an incoming crypto, PayPal asks for several confirmations on the blockchain, depending on the crypto assets. You have to use a publicly available blockchain viewer to check the status of your incoming transfer.

How To Receive And Send Crypto To Other PayPal Users?

Sending and receiving crypto among PayPal users is easy, and a blockchain network fee is not charged.

Below are the steps to transfer cryptocurrency to another PayPal account.

Log in to your PayPal app.
Go to the crypto section.
Click on crypto balance.
Select the coin from the options.
Tap on the transfers button.
Select send.
Click on sync contacts and confirm to allow PayPal access to your contacts.
Select the contact you want to send crypto to from the PayPal contacts.
Confirm and send.

Now that you are clear on transferring crypto, let’s discuss the transfer limits.

What are the maximum and minimum amounts that you can transfer?

The maximum crypto you can transfer through PayPal is $10,000 weekly. It includes internal (PayPal to PayPal) and external (to an external wallet) transfers—the transfer limit resets automatically every Friday.

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The minimum amount for internal transfers is $0.01 per transfer. For an external transfer, the minimum amount varies with the cryptocurrency used.

Below are the minimum limits for different cryptocurrencies.

Bitcoin-0.001 BTC
Litecoin-0.01 LTC
Ethereum-0.01 ETH
Bitcoin cash-0.01 BCH
PayPal USD-10 PYUSD

Below are some essential points you must know before initiating a crypto transfer through PayPal.

You can’t cancel or reverse a crypt transfer after initiating it. Therefore, confirm the details before sending.
Suppose you send the crypto to an incorrect address; in this case, if you know the recipient, you can request that it be returned to you. If you don’t know the owner, you can’t do anything about it. The same applies to sending crypto to an incorrect PayPal account.
Blockchain transfers into or out of PayPal take approximately 2 hours to complete. This might change depending on the crypto assets and network congestion.
If you receive crypto from your PayPal, you must use the settings to receive it within 30 days and claim the crypto assets. If you don’t, it’ll be re-sent to the sender.
After completing a blockchain crypto transfer, you’ll receive a transaction hash (txHash). It can be used to look up for additional details about the transaction.

Buy And Sell Crypto With PayPal

PayPal users can buy, store, and sell four types of crypto assets: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

How do you buy cryptocurrency through PayPal?

You must first have a verified PayPal balance account to buy cryptocurrencies using PayPal.

If you’re a regular PayPal user, you’ll already have this. If not, you must provide your name, physical address, date of birth, and taxpayer identification number to verify your PayPal balance account.

Buying and selling are not allowed for PayPal users outside the US or business users.

If you’ve confirmed your eligibility, let’s see how to buy crypto on PayPal.

Log in to PayPal.
Select the finance tab.
Tap crypto. You’ll find the market price of the crypto assets on the crypto page.
Select your desired cryptocurrency from Bitcoin, Ethereum, Bitcoin Cash, and Litecoin. You’ll see the price graph and buy button here.
Submit the identification documents requested for verification and accept the terms and conditions.
Enter the amount of dollars for which you want to purchase crypto.

The maximum amount for crypto purchases is $100,000 per week. The minimum amount varies with the cryptocurrency. It’s 0.01 for Bitcoin Cash, Litecoin, and Ethereum, and 0.001 for Bitcoin.

Choose the payment method. You can pay via debit card, linked bank account, or PayPal balance.
Tap on ‘buy’ and confirm your purchase. PayPal updates the market value of crypto assets every few seconds. So, you’ll receive the amount you see while tapping the buy button.

How do you sell crypto assets on PayPal?

Log in to PayPal.
Go to the finance tab.
Tap on crypto.
On the crypto page, you can view the current prices of the crypto assets, sell-through rates, and your crypto assets holdings.
Select the crypto assets you want to sell and tap sell.
Confirm the tax information and verification.
Enter the amount you want to sell and tap next.
Click ‘sell now.’

The proceeds of the crypto sales will be deposited to your PayPal balance in USD. You’ll receive this within seconds unless there’s an issue.

You can use the proceeds of the sale to:

Make purchases.
Transfer it to a wallet or any other balance account.
Deposit it into a PayPal-linked debit card or bank account.

Holding Crypto On PayPal

You can hold your crypto assets in PayPal and will not be charged any fees.

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Go to finances and then the crypto tab to view your holdings and market values of crypto assets.

A wallet is more secure than a balance account if you hold many crypto assets. Learn more about cryptocurrency wallets and how to choose the best one for your needs here.

Tip: You can receive crypto price change alerts through push notifications on the PayPal app. Go to settings to see the crypto alerts under the bell icon. You can customize the alerts for specific cryptocurrencies and specific drops and rises in the crypto exchanges.

Applicable PayPal Cryptocurrency Fees

The pricing structure of PayPal crypto purchases is similar to Venmo. There’s a transaction fee based on the purchase amount, and an additional 0.5% trading cost based on the coin’s exchange rate and market conditions.

So you’ll pay slightly more than the market price while buying, and receive somewhat less than the market price while selling.

Quick Tip: PayPal cryptocurrency charges are slightly higher than other platforms. The same goes for international payments made through PayPal. Wise is a better option if you want to make international payments. You can easily set up a Wise account and transfer money from PayPal to Wise. Learn more about sending money from PayPal to Wise here.

Below are the transaction fees based on the purchase amount.

Purchase amount	Fee
$1-$4.99	$0.49
$5-$24.99	$0.99
$25-$74.99	$1.99
$75-$200	$2.49
$200-$1,000	1.8%
Greater than $1,000	1.5%

PayPal Crypto Tax Forms And Protection Policies

All crypto sales made on PayPal are taxable. PayPal users can get 1099 forms when necessary, and PayPal will report the same to the IRS.

PayPal will protect your account from unauthorized purchases or sales. If an unauthorized purchase or sale occurs under this protection, PayPal will cover the total amount of the unauthorized transaction.

PayPal also protects your account from unauthorized crypto asset transfers. If an unauthorized transfer is made under PayPal protection, you’ll get a reimbursement of up to $50,000. This reimbursement represents their warranty, and PayPal doesn’t provide any insurance for your crypto assets.

Unauthorized crypto transactions are purchases, sales, or transfers made without your authority. Suppose you give someone your PayPal login details, and they exceed the authority you gave them; in such a case, PayPal will not take responsibility for this.

PayPal purchase protection also doesn’t apply to purchases, transactions, or sales made in the crypto hub.

Contact customer support immediately if you suspect any unauthorized activity in your account.

Your crypto assets in PayPal are also not eligible for Federal Deposit Insurance Corp. coverage like other exchanges.

Are You Ready To Send, Buy, And Sell Crypto With PayPal?

PayPal users can send, receive, hold, buy, and sell cryptocurrencies through PayPal. It allows the exchange of four digital currencies: Bitcoin, Litecoin, Bitcoin Cash, and Ethereum. In addition, PayPal has a stablecoin named PAYUSD.

You can transfer crypto from external crypto wallets to PayPal, PayPal to external wallets, and PayPal to PayPal. PayPal charges a blockchain network fee for external transfers and doesn’t charge network fees for internal transfers.

You can buy and sell crypto on PayPal. It charges transaction fees and 0.5% trading costs for buying and selling crypto. There are protection policies to prevent unauthorized transfers.

Follow the steps mentioned in the article to buy and sell crypto and to transfer funds from PayPal to Crypto, and vice versa smoothly.

FAQs

1. Can Crypto Transfers Be Canceled On Paypal?

No, you can’t cancel a crypto transfer made on PayPal. It would be lost if you entered an incorrect wallet address or account. If you know the recipient, you can ask them to return it.