PayPal Confirms Its Plan to Develop Cryptocurrency Capabilities in its Letter to the European Commission

In a letter to the European Commission in March 2020, payment giant PayPal has now confirmed that has it is actively working to bring cryptocurrencies capabilities on its platform.

In the detailed letter, PayPal said that it has taken tangible and unilateral steps to further develop its capabilities in the cryptocurrency space.

In June 2020, sources emerged saying PayPal was planning the roll-out launch cryptocurrency buying and selling services.  However, the company declined to comment on the matter during that time.

PayPal Keen on Driving Competitive Advantage

In December 2019, the European Commission opened a consultation about regulating cryptocurrencies and digital assets or what is commonly recognized as crypto-assets. The commission wanted feedback on building a European Union’s regulatory framework for crypto-assets.

In the current letter to the European Commission, PayPal stated that it is supportive of an EU regulatory framework. The digital payment giant said that crypt-assets and blockchain could assist in achieving greater financial inclusion and assisting in eliminating/reducing some of the pain points, which exist in today’s financial services.

PayPal admits that as these technologies continue evolving, thoughtful regulations could foster innovation, and promoting clarity could help the industry thrive and grow.

The firm wants the commission to set out clear definitions of various crypto-related activities to ensure sufficient investor and consumer protection. PayPal also suggested the commission to put crypto-related activities within the scope of the EU’s existing anti-money laundering regulation. Furthermore, PayPal recommended that any regulatory framework in Europe should strive to remain technologically neutral to support competition and innovation in the fast-evolving space.

In the letter, PayPal said that it initiated its development in the crypto space since last year when it joined Facebook’s Libra Association as a member in June 2019 to learn about blockchain and cryptocurrency. However, the company left the association in October 2019.

PayPal clarified that it took the decision to drop out of the Facebook-led association in order to focus on its existing mission and business priorities to democratize access to financial services.

Fintech Firms Increasingly Embrace Blockchain Technology

Fintech companies are increasingly showing interest in blockchain and cryptocurrencies. Multiple joint projects between cryptocurrency firms and banks now provide customers with the opportunity to invest in crypto-assets and take advantage of banking services related to crypto-assets. This is all happening in a regulated environment as traditional financial institutions are increasingly becoming friendly to the crypto industry.

Initially, several major crypto exchanges like Coinbase and others were already providing users to buy crypto assets using PayPal. But now, PayPal is seriously planning to offer cryptocurrency services directly to its customers. The California-based company has 300 million active users worldwide and has a huge presence in Europe. The firm has operations in 31 European jurisdictions, serving about 95 million consumers and merchants.