Paypal better have something unique to offer to get ahead of the game in my opinion. Does not matter whether you joined the cryptocurrency train, if you are just another platform that offer the same services, time will come for you eventually. I have my hopes on Paypal that they will do something because as OP said, the race is on. You need to use what you can to get ahead of the game.
i heard all they are going to do is hold it on paxos exchange.... so if paxos gets hacked( probably a big target considering itll be paypals(mainstreams) btc holding spot) paypal takes no responsiblilty for your losses...... i think this isnt going to last long once news gets out, unless they change things and maybe take some liability.
if that is the case then paypal will have no choice but to fold the crypto aspect of their paypal plan
I'd guess though that PayPal would make sure they have a 'seperate cold wallet" with some kind of dual control and such..or they are idiots...I mean the normal
user is NOT supposed to keeo their BTC/Crypto on an exchange..thus either it is seperate and maintained by an exchange but really the cold wallet is under
PayPal's control...or as they say..not your keys..not your bitcoin/crypto...I can't see them (1) giving up that kinda control and (2) being that damn stupid to do so.
If such happens like you say and PayPal was to 'hedge' on covering such..well that could put BTC/Crypto for adoption 'back' 5 years indeed if PayPal was that slimy.