In a letter to the European Commission, PayPal has confirmed that it is currently developing cryptocurrency capabilities.
PayPal Working on Crypto Functions
Online payment service provider PayPal has been developing cryptocurrency capabilities in recent times. The company confirmed this information in a letter addressed to the European Commission concerning the EU framework for cryptocurrency markets. This latest development comes after we reported a few weeks ago that PayPal and Venmo are rumored to be working on allowing its users to purchase and sell cryptocurrencies directly very soon.
The letter was published in June by PayPal alongside numerous responses to the Commission. PayPal issued the letter to the Commission as a response to the public consultation launched in December 2019 on developing an EU framework for the cryptocurrency market.
Paypal told the European Commission (EC) that the cryptocurrency sector has experienced massive growth over the past few years. With that in mind, PayPal has been monitoring and evaluating global developments in the cryptocurrency and blockchain sector, and it is now ready to make its move.
PayPal and Libra
PayPal explained in the letter that it is involved with the Libra project, which was proposed by social media giant Facebook. The company highlighted the fact that it signed a non-binding letter of intent to participate in the Libra Association. It further clarified that since the beginning of the Libra project, PayPal had taken uniform and concrete steps towards further developing its own capabilities in the crypto asset area. PayPal added that after exiting the Libra project, it continued to focus on enhancing its mission and business priorities to enable people to gain further access to financial services.
The PayPal Crypto Vision
In the letter, PayPal also revealed that it currently has more than 300 million active accounts globally, with millions of new users registering on the platform annually. The company provides financial services to millions of customers and businesses in 31 EU countries and has a license to offer banking and payment services in Luxembourg.
In terms of the EU framework for cryptocurrencies, PayPal told the Commission that the regulatory framework should be designed to enable innovative products and services to be introduced into the market without unnecessary regulatory burden. This should be done alongside providing regulatory clarity, guidance, and safeguards.
In its letter, PayPal mentioned three crucial points. Firstly, the company suggested that the EU framework for the crypto space should have a clear set of definitions regarding various cryptocurrency activities. This will ensure that companies operating in such activities are adequately licensed and regulated. Secondly, PayPal suggested a precise application of a risk-based approach, following the principles underlining the existing AML regulations in the EU and the entire world. Finally, any regulatory framework in the EU region should be designed to be technology-neutral to support innovation and competition in the cryptocurrency space that is fast evolving. The Financial Action Task Force (FATF) further suggested a risk-based approach to regulating cryptocurrencies and service providers in similar sectors.
Late last month, PayPal and its subsidiary payment service, Venmo, were rumored to be preparing to offer direct cryptocurrency buying and selling services on their platforms. PayPal representatives did not confirm or deny the rumor at that time. However, the company is not new to the cryptocurrency sector. In 2018, PayPal filed a patent that would allow it to explore the expedited cryptocurrency transaction system. Paypal CEO, Daniel Schulman, also revealed in November last year that he owned Bitcoin.