UPDATE: "PayPal making a move to embrace Bitcoin" says Braintree CEO

The rumors are true: PayPal is integrating bitcoin payments into their One Touch mobile wallet system using technology developed by their subsidiary Braintree. Speaking at TechCrunch Disrupt San Francisco today, Braintree CEO Bill Ready said that the company will soon be integrating bitcoin payments via a partnership with Coinbase. Not hedging his bets, Ready made the intention behind the move as unambiguous as possible: “This is PayPal making a move to embrace Bitcoin.”

Ready declined to give an exact timeline for the adoption, although he did say that the adoption would be taking place “over the coming months,” and that major Braintree customers were moving towards bitcoin adoption.

The report was quickly confirmed on the Coinbase blog, the PayPal blog and on Braintree’s website.

The implications of this new partnership are immense. In addition to dramatically increasing bitcoin’s legitimacy as a payment system, the move will almost certainly raise bitcoin’s adoption rate among eBay merchants and PayPal-accepting businesses. PayPal released a teaser video touting bitcoin payments this morning, indicating that the default PayPal app will now serve as a de facto bitcoin wallet. In principle, this means that tens of millions of new bitcoin wallets will be activated when the newly updated app goes live, although users will still need to create or connect to a Coinbase account to use them.

The partnership is also fueling rumors that eBay has plans to acquire Coinbase, something that wouldn’t be entirely unexpected given that Coinbase investor Marc Andreessen is on eBay’s board, and likely played matchmaker in the PayPal deal. Even if there are no such plans, Coinbase stands to gain a huge boost in both profit and visibility thanks to the PayPal partnership.