What's wrong with PayPal's intention to support cryptocurrencies

What's wrong with PayPal's intention to support cryptocurrencies

The payment system will not allow digital money to be withdrawn or entered. There are several reasons for this.

PayPal users will not be able to withdraw the cryptocurrency from their account and transfer it to other Accounts payPal. It will also be impossible to store cryptocurrency purchased elsewhere. Customers will not receive private keys to their wallets, and access to digital money will only come from a PayPal account, according to the company's announcement.

The platform intends to support Bitcoin, Ethereum, Litecoin and Bitcoin Cash. PayPal provides access to cryptocurrencies under a limited license from the New York State Department of Financial Services. To do this, a partnership was made with the holder of the full BitLicense - service Paxos. The license will be valid for two years, then it will need to be extended or updated to the full.

PayPal licenses do not apply to cryptocurrency trading, explained Maria Agranovskaya, a lecturer at Moscow Digital School. In addition, the company is obliged to check each customer. It risks losing its license if it turns out the system is funded through the hands of terrorists or sourced from North Korea or other undesirable sources.

"Obviously, the company does not want to take risks. Refusal to withdraw cryptocurrency may be related to the establishment of internal compliance," Agranovskaya explained.

Most jurisdictions come to such interaction with wallets, when the system does not give the user direct access to funds, said Roman Jankovsky, a member of the Digital Economy Legal Commission of the Moscow branch of the Russian Bar Association.

"All aspects of the implementation of legal regulations in relation to cryptocurrency can technically be implemented only if the user does not have direct access to the wallet," Jankowski explained.

The announcement of PayPal accelerated the growth of the bitcoin exchange, which on the night of October 22 on the Binance exchange updated the annual high of $13,217 thousand.


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