Recently, PayPal dropped a bombshell by announcing an upcoming policy shift set to exclude non-fungible tokens (NFTs) from its Purchase Protection and Seller Protection Programs, effective May 20, 2024.

This alteration, quietly slipped onto the company's website on March 21, spells significant changes for all NFT transactions conducted through PayPal, stripping participants of vital safeguards against fraud and chargebacks.

Prior to this move, PayPal had ventured into facilitating direct sales and custody of NFTs on its platform, signaling its initial foray into the burgeoning digital asset market. The company even went as far as filing a patent related to NFTs back in 2022, hinting at its ambitions in this space.

The revision of PayPal's protection policies marks the latest twist in its evolving relationship with the digital asset landscape. Despite recent setbacks, PayPal hasn't entirely severed ties with the cryptocurrency realm. In 2023, it introduced PYUSD, a stablecoin tethered to the value of the U.S. dollar.

PYUSD experienced a surge in market capitalization, peaking in late February with a valuation exceeding US$300 million. However, its fortunes have since dwindled, with its market capitalization plummeting to US$200 million in subsequent months.