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Wednesday, July 15, 2020

PAYPAL DEVELOPS CRYPTOCURRENCY CAPABILITIES, LETTER TO THE EUROPEAN COMMISSION CONFIRMING


Paypal has confirmed that it has developed cryptocurrency capabilities in a letter sent by the company to the European Commission regarding the EU framework for the cryptocurrency market. Recently, Paypal and Venmo are rumored to be allowing users to buy and sell cryptocurrency directly.

Paypal’s Crypto Plans


In a letter to the European Commission (EC), Paypal revealed his work in developing crypto capabilities. The letter was in response to a public consultation launched in December last year about establishing an EU framework for markets in crypto assets. According to Ledger Insights, a Paypal letter was issued in June, along with a number of other responses received by the Commission.

"The crypto-asset industry has experienced substantial growth over the last few years," Paypal told EC. "Therefore, Paypal continues to monitor and evaluate global developments in the crypto space and blockchain / ledger distribution."

In the letter, the company explained its involvement with the Libra project, proposed by social media giant Facebook. Noting that it signed a letter of non-binding intention to participate in the Libra Association, Paypal clarified:

Since the project’s inception, Paypal has taken unilateral and tangible steps to further develop its capabilities in this [crypto asset] area.

The company went on to explain that after leaving the Libra project, it continued to "focus on advancing our existing mission and business priorities to democratize access to financial services." 

In the letter, Paypal claims to have more than 300 million active accounts worldwide, with millions of new users added every year. The company serves customers and businesses in 31 European jurisdictions and is licensed to provide banking and payment services in Luxembourg.

Regarding the EU framework for crypto assets, Paypal told the EC that "The regulatory framework must allow innovative products and services to be brought to market without undue regulatory burdens while simultaneously providing clarity, guidelines and regulatory safeguards."

Three main points are mentioned. First, Paypal recommends that the EU crypto framework must have "a set of clear definitions of various crypto activities ... to ensure that companies involved in these activities are properly licensed and regulated." Second, the company was called for "the proper application of a risk-based approach, in line with the principles underlying EU AML regulation and existing global standards," and finally "every regulatory framework in Europe must strive to be technology neutral to support innovation and competition in this fast-growing space, "the company explained. The Financial Action Task Force (FATF) also recommends a risk-based approach to managing cryptocurrency and related service providers. 

Last month, Paypal and Venmo, Paypal's cellular payment services, reportedly will soon offer direct purchases and sales of crypto. News.Bitcoin.com reaches Paypal but company representatives do not confirm or refute the rumors. Paypal, however, is not new in crypto space. In 2018, the company filed a patent for an accelerated cryptocurrency transaction system. Its CEO, Daniel Schulman, also said in November that he owned bitcoin. In the letter, Paypal claims to have more than 300 million active accounts worldwide, with millions of new users added every year. The company serves customers and businesses in 31 European jurisdictions and is licensed to provide banking and payment services in Luxembourg.

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