- In a letter to the European Commission, payment giant PayPal confirms that it is developing crypto capabilities and supports a harmonized legal framework.
- PayPal also confirmed that its partnership with Facebook’s Libra brought it closer to the crypto industry.
In a letter to the European Commission, payments giant PayPal has confirmed that it is developing “crypto capabilities”. PayPal’s document is a response to a consultation by the European Commission on a possible legal framework for crypto assets. The consultation was open from December last year until March 2020 and received more than 60 responses from different companies and sectors.
A few weeks ago, a rumor claimed that PayPal might offer direct purchases of Bitcoin and other cryptocurrencies. The rumor caused debate in the crypto community because of the anti-crypto stance that PayPal was supposed to have. However, in its response to the European Commission, the payment giant reveals the opposite.
According to the document, PayPal recognizes the significant growth that Bitcoin and the crypto market have experienced in recent years. PayPal says it is constantly monitoring developments in blockchain technology and distributed ledger technology. Furthermore, PayPal claims to have a particular interest in applications that facilitate and enhance existing financial services.
The payment giant believes that the best regulatory approach should support innovation and promote clarity. In that regard, PayPal claims to support a “harmonizing” legal framework across the European Union market:
The regulatory framework should allow for innovative products and services to be brought to market without undue regulatory burden while simultaneously providing regulatory clarity, guidance, and safeguards.
In addition, PayPal believes that a lack of clarity and regulation discourages companies from engaging in crypto related activities. According to the statement, “grey areas” are created that are exploited by malicious actors to affect consumers. A transparent and clear legal and regulatory framework, PayPal concludes, would protect investors.
Partnership with Libra brought PayPal to Bitcoin
According to the letter, PayPal began to approach the crypto industry through its partnership with Facebook’s Libra project. In 2019, PayPal signed an agreement of intent to participate in the project that was suspended, but which had an impact on PayPal’s approach to cryptocurrencies. In that sense, the company stated the following:
Since the project’s inception, PayPal has taken unilateral and tangible steps to further develop its capabilities in this area, and (…) to continue to focus on advancing our existing mission and business priorities to democratize access to financial services
In fact, the Libra project wallet subsidiary, Calibra, also participated in the consultation. Within Calibra’s document, the subsidiary takes a similar position to PayPal to “minimize costs, increase access and ensure consistency across the European Union market”.