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PayPal’s entrance into the cryptocurrency space has been confirmed according a recently published letter to the European Commission.
Dated March 20th, the letter served as PayPal’s response to the European Commission’s consultation framework regarding the banking service and building cryptocurrency services in the financial sector.
PayPal’s Interest Piqued By Growth Of Crypto Industry
In the letter, PayPal explained that it is aiming to consider cryptocurrency as a means to help fulfil its mission to “democratize access to financial services and the digital economy across the globe”.
As a result, the company acknowledged the “substantial growth” of Bitcoin investment and the cryptocurrency industry as a reason to keep an eye on it and the technology behind blockchain, stating:
“PayPal is continuously monitoring and evaluating global developments in the crypto and blockchain/distributed ledger space. Of particular interest for us is how these technologies and crypto-assets can be utilized to achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services.”
The payments giant continued to suggest that with thoughtful evaluation and considered regulation, the company would be “supportive of a harmonized approach across EU markets on applicable licensing or authorization requirements.”
Three Fundamentals For Development Of Crypto-Assets Framework
With this, PayPal outlined three fundamental principles that it considers crucial in the development of an EU framework for crypto-assets, that is:
- Clear definitions. “Definitions [of] various crypto activities should be put in place to ensure that companies engaged in such activities are properly licensed and regulated. Lack of clarity as to the regulatory expectations for such activities creates uncertainty that may discourage companies from actively participating.”
- Anti-money laundering (AML) protocols. PayPal’s letter calls “for a proper application of a risk-based approach, in line with the principles underpinning existing EU AML regulation and global standards.”
- Adopt a technology-neutral approach. “[With] continuous advancements in areas such as decentralized networks, consensus protocols, and cryptography, any regulatory framework in Europe should strive to be technology-neutral to support innovation and competition in this fast-evolving space.”