PayPal intends to continue offering crypto services, while complying with the sometimes particularly strict rules of regulators. At least, that’s what seems to come out of its membership in the TRUST network, in which we find major players in the ecosystem, such as Coinbase, Circle, Kraken and Robinhood.
PayPal joins the TRUST network
The Travel Rule Universal Solution Technology (TRUST) network focuses on the travel rule as its name suggests. It requires financial institutions to share specific information about users when money is transferred over a certain amount.
The Financial Action Task Force (FATF) published its latest recommendations in 2021, which are followed by the world’s largest economies, including the G7 countries. They imply that all transactions over $1,000 of cryptocurrencies should be tracked, with the collection of identity information.
This is therefore potentially a major drag on crypto businesses, which is why the TRUST network was created, initiated by Coinbase. Several big names in the ecosystem are already involved, including Binance.US, Kraken, Robinhood, Circle and Paxos.
The TRUST network has one goal: to provide the information requested by regulators, while preserving as much as possible the data related to the identity of users.
The giant PayPal is in any case a recruit of choice for TRUST, which is pleased that 38 players have already joined the network:
“The addition of PayPal marks another major step in the development of TRUST to become the global solution for Travel Rule compliance.”
In Europe, the Travel Rule and MiCa are also a concern
Although this is largely played out with American players, Europe is of course not spared. The European Union is even stricter: digital asset service providers will have to disclose all information about transactions to and from other trading platforms, regardless of the amount. The same goes for transfers to and from self-hosted wallets, starting at €1,000 in transactions.
For the moment, the Travel Rule is not enforced, and the official publication should only occur in Europe in 2023, for an effect beginning around 2024. In the meantime, groups such as the TRUST will have to fight to balance the playing field with regulators.