Amid the crypto winter, it seems clear that Paypal has not lost its interest in crypto. On the contrary, the payment giant has made another move after collaborating with crypto exchange Coinbase’s TRUST network for crypto payment. On 22nd August, the leading digital payment platform revealed that it had been added to the Coinbase Travel Rule Universal Solution Technology (TRUST) network, joining a list of big names in the crypto space that have shifted to comply with digital asset travel rules.
PayPal marks a milestone in the crypto space
In June, the digital payment giant Paypal made its foray into the crypto sector by rolling out its infrastructure, which enabled customers to transfer, send and receive crypto assets between PayPal and other crypto wallets and exchanges. Before that, users were only limited to buying and selling crypto within PayPal. PayPal has now continued its crypto journey it first followed after introducing crypto trading for its users in October 2020. Coinbase confirmed in a blog post that Paypal has partnered with Coinbase to uplift its compliance with the financial industry’s ‘travel rule’ TRUST. This partnership creates a way for users to explore their crypto assets on Paypal easily.
“The addition of PayPal marks another milestone in TRUST’s journey to become the global, industry-standard solution for Travel Rule compliance” Coinbase stated in the announcement.
Importance of TRUST for PayPal
For your information, the Travel Rule is a part of the Bank Secrecy Act and instructs the compliance of US financial institutions. The Travel Rule requires financial institutions to share information if any customer transfers funds above a set limit. The Financial Action Task Force (FATF) announced travel rule recommendations for VASPs (Virtual Asset Service Providers) in June 2021. FATF currently serves the G7 and 30 other developed countries, and this intergovernmental organization manages anti-money laundering regulations. The law states that the FATF gives the sender’s and receiver’s information if any crypto transaction exceeds $1,000. Additionally, the FATF suggests VASPs attach the sender’s address, numbers, account names, and the recipient’s identity.
According to USDC issuer Circle, TRUST now has 38 members after adding Paypal. Today, TRUST includes giants like Binance.US, Nexos, Circle, Robinhood, Fidelity Digital Crypto.com, Gemini, Kraken, and an extensive list of other platforms. By adopting a risk management and compliance solution from Exiger, it will avoid using a central repository for user data and ensure the reliability of its members. TRUST gives top priority to the security and privacy of users, and its members must only declare necessary information without jettisoning users’ privacy. PayPal will adapt the solution provided by the network to comply with the rules.
PayPal was experiencing a lack of crypto-strategies mentioned in the firm’s second-quarter earnings call after making bullish moves into the sector in 2020 and 2021. The insinuation was that PayPal’s crypto goals had been withdrawn. As far as the crypto world is concerned, the crypto community expects it to be a tremendously positive step from PayPal, and it has been established as a serious player in the open, broad crypto ecosystem.
