I don't see this happening to be honest. Centralized exchanges are slowly losing against DEXes, so I don't see how PayPal would do any better. If anything, they're doing much worse than the currently existing platforms by not letting their users withdraw funds to their personal wallets.
And I realize that a lot of people are excited about this, but I just don't see why. Skrill has done the exact same thing some months ago, and no one turned this into a big deal so PayPal should be no different.
There are a lot of differences between Skrill and PayPal. First of all, PayPal is on another level. Alone the fact that it's accepted on eBay means a lot along with the fact that it was founded by eBay. Skrill has 35 million users while PayPal has more than 305 million active users. Almost 10x difference means a lot.
PayPal has a great reputation too, not much among merchants but high among its users who use to as a payment method. In overall, it looks like the steps into crypto is done by the leader online payment service provider.
Personally, I think that paypal's aim should be this, to become the leader in crypto industry. They can't be the best exchange right now because Binance is the leader in this case and has the best resources available in the crypto world to be the number one (for example, they own coinmarketcap.com that had 200-300 Alexa rank during peak times).
Maybe they aim to be exchange too but right now I think they want to be the leader payment service provider that accept crypto payments and conquer this field in the crypto world.