One of the most popular online e-wallet services has just overhauled its cryptocurrency offering. From today, customers of Skrill will be able to exchange the various crypto assets the platform supports directly for Bitcoin.
The expanded service is the latest example of a payments company offering some cryptocurrency functionality. However, modern financial services firms, such as Skrill, Square, and Robinhood, remain custodial services with limited functionality outside the realms of speculation. This brings their relevance as part of any potential crypto revolution taking place in finance into question.
Skrill Follows Market Trend by Increasing Scope of Crypto Offering
Major e-wallet provider Skrill has just announced changes to its crypto asset exchange service. The company has allowed its users to buy and sell a range of digital currencies from directly within their existing account since last year. However, before now, each exchange between supported assets would require converting back a fiat currency before taking on exposure to the new digital currency.
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From today, Skrill users will be able to trade between Bitcoin and those crypto assets it supports directly. The company now lists exchange pairs between the leading digital currency by market capitalisation and those altcoins it also supports. These are Bitcoin Cash (BCH), Ether (ETH), EOS, Ethereum Classic (ETC), Litecoin (LTC), Lumens (XLM), XRP, and 0x. There are plans to introduce additional exchange pairs at a later date.
A report in CasinoBeats, an online gambling-focused publication, cites the CEO of Skrill Lorenz Pellegrino as commenting the following on the new functionality offered to the company’s customers:
“Cryptocurrency is an important part of what we do in digital wallets and using our scale and vast experience of the payments industry, we’re continually enhancing our service to help our customers get the most out of the crypto ecosystem.”
Modern financial services companies, like Skrill and others, are increasingly eager to offer crypto asset services to their customers. The likes of Circle Pay and Robinhood have quickly taken a lead, encouraging Skrill and others to play catch up. Skrill is the first member of the global payments giant Paysafe Group to adopt the crypto-to-crypto support but there are already plans for sister company Neteller to add the same functionality in the coming months.
However, Skrill, like other e-wallet services offering cryptocurrency support do not exactly complement the permissionless nature of Bitcoin and other crypto assets. Once a customer takes up exposure to a digital currency through such a platform their only option is to sell it again for fiat currency or Bitcoin. They cannot withdraw any crypto to a wallet to which they hold their own private key. This severely limits the utility of the digital assets they are holding through the platform in question.
By not allowing crypto withdrawals, Skrill and others ultimately render each cryptocurrency a tool for speculation only. Yet, such peer-to-peer protocols are designed so that they can be used without middlemen at all. It feels a lot like those firms racing to offer some form of crypto exposure completely forgot this part of the programme.
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