It’s clear PayPal hasn’t lost its interest in crypto, having now joined several other big-name companies in Coinbase’s Travel Rule Universal Solution Technology (TRUST) network.
PayPal was conspicuous by its lack of crypto-strategy mentions in the firm’s second-quarter earnings call, according to Fortune, having made bullish moves into the sector in 2020 and 2021. The insinuation was that the company’s crypto ambitions had faded.
But the digital payments giant has now shown it’s set on the path it first followed after introducing crypto trading for its customers in October 2020.
Up until recently, those trading capabilities had been pretty limited, with users only able to buy and sell a handful of crypto assets garden-walled within the PayPal system. But as of June this year, the transfer of crypto on and off PayPal – to other wallets and exchanges – has been enabled.
As far as the crypto industry is concerned, that was a hugely positive step forward for the company, which can now be taken seriously as player within the open, broad crypto ecosystem.
And the TRUST move is a further sign it, too, is serious about crypto trading in a sector that largely seems keen to shed its notorious Wild West of finance image.
What is TRUST and why is it important for PayPal?
Announced in a blog post today by Coinbase, PayPal’s TRUST move will help ensure the payments provider follows regulatory compliance with the USA’s Bank Secrecy Act (BSA) rule 31, more commonly known as the digital asset “travel rule”, which is obviously easier to remember.
This ruling decrees that virtual asset service providers (VASPs) must pass on specific information relating to customer fund transfers (of US$1,000 and up) from one financial institution to another.
PayPal now joins about 37 other crypto-focused companies that have moved to compliance with what is a pretty pain-in-the-rear, red-tape ruling. Those include top exchanges such as Crypto.com, Binance.US, Gemini and Kraken, along with USDC issuer Circle, asset manager Fidelity Digital, crypto lenders Nexo and BlockFi, and trading app Robinhood.
What Coinbase’s TRUST network effectively does is streamline the reporting for US crypto-transacting companies, making the sharing of info easier and more transparent, while still protecting user privacy, without using a central store of user data.
TRUST was reportedly formed in response to crackdown rumblings from the inter-governmental Financial Action Task Force (FATF) on VASP compliance with anti-money laundering (AML) and anti-terrorist financing (ATF) policies.
“The addition of PayPal marks another milestone in TRUST’s journey to become the global, industry-standard solution for Travel Rule compliance,” wrote Coinbase in its announcement today.