Abu Dhabi, UAEFriday 7 August 2020

FUTURE

PayPal confirms it is developing cryptocurrency capabilities

Company tells the European Commission that thoughtful regulation that fosters innovation could help the industry grow and thrive

Last month, PayPal listed a job opening for 'technical lead – crypto engineer' on LinkedIn and its website. AP
Last month, PayPal listed a job opening for 'technical lead – crypto engineer' on LinkedIn and its website. AP

PayPal is developing its own cryptocurrency capabilities with a view to achieving greater financial inclusion, the company said in a letter to the European Commission.

The FinTech said it "is continuously monitoring and evaluating global developments in the crypto and blockchain/distributed ledger space” and has taken “unilateral and tangible steps to further develop its capabilities in this area”.

The letter was in response to the commission’s appeal for public consultation on an EU framework for cryptocurrency asset markets.

“Of particular interest for us is how this technology and crypto-assets can be utilised to achieve greater financial inclusion and help reduce some of the pain points that exist today in financial services,” PayPal said.

Speculation about PayPal’s foray into cryptocurrencies gained pace last month after the FinTech listed a job opening for “technical lead – crypto engineer” on LinkedIn and its own website.

News website CoinDesk later reported that Paypal planned to introduce a new service that would allow its 305 million users to directly sell and purchase cryptocurrencies through its platform.

However, the company did not respond to a request seeking details about this service from The National at the time.

PayPal told the commission that thoughtful regulation that fosters innovation while promoting clarity could help the cryptocurrency industry grow and thrive.

“We would be supportive of a harmonised approach across EU markets on authorisation requirements ... the regulatory framework should allow for innovative products and services to be brought to market without undue regulatory burden,” the company said.

Paypal has a licence to provide banking and payments services in Luxembourg, allowing it to serve customers and businesses in 31 European jurisdictions, representing about 95 million merchants and consumers.

Last year, the FinTech signed a non-binding agreement to support Facebook’s cryptocurrency project Libra, but later backed out after regulatory pressure on the project increased.

The company told the commission that its intention in joining hands with Facebook was to learn “more about the proposed use of blockchain technologies to provide financial services to unbanked populations across the globe”.

“Without questioning the value of the project, [PayPal] took the decision not to participate in the Libra Association and to continue to focus on advancing our existing mission and business priorities to democratise access to financial services,” the company said.

Customers can use PayPal services as a method to deposit and withdraw funds from crypto exchanges but the company does not directly sell digital currencies.

It enables the receipt of funds in more than 100 currencies and withdrawals in 56 currencies.

Updated: July 16, 2020 12:47 AM

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