PayPal, a giant in the field of technical payments, has been added to the TRUST network along with a bunch of big names in the cryptocurrency sector, also gradually moving to comply with the “Travel rule”.
Major crypto exchange Coinbase has reportedly confirmed the entry of PayPal, the American payment giant PayPal into TRUST Network in accordance with the financial industry’s Travel Rule.
Travel Rule Universal Solution Technology (TRUST) Network was first introduced in 2022 as an anti-money-laundering initiative led by Coinbase.
As of February 2022, there were only 18 entity members but the force’s modest start has quickly scaled up with a total of 38 members up to this point.
AML Gains Strength
Notable names include Binance.US, bitFlyer, BitGo, Bittrex, BlockFi, BlocPal, Circle, Crypto.com, Robinhood, Tetra Trust, Voyager, Kraken, and Gemini, among others.
These leading firms in the industry have been united in the mission of protecting users’ privacy while complying with the Travel Rule, which requires financial institutions to share certain basic customers’ information if they are sending huge amounts of money.
Coinbase stated that the presence of PayPal in TRUST network would drive widespread acceptance of the initiative. “The addition of PayPal marks another milestone in TRUST’s journey to become the global, industry-standard solution for Travel Rule compliance.”
TRUST employs a solution of two key features including a centralized message board to identify each VASP party at both ends of the transaction, and an encrypted peer-to-peer channel for one-to-one data exchange.
The force was established on the advice of the International Financial Task Force (FATF) in June 2021 for VASPs globally to follow specific rules to stay in line with anti-money laundering policies and attempting to stop money from going to terrorists.
Members of TRUST have access to a wide array of resources and capabilities, such as full compliance with the Travel Rule and proof of ownership. Because of this, its members don’t have to worry about getting in trouble with the authorities in the United States.
On the other hand, there are rumors floating around that the exchange platforms were selling user data to the government agency. Coinbase has dismissed all of the allegations.
PayPal has long been involved in the crypto space since 2016 when the firm submitted a patent application for a new type of digital wallet that speeds up cryptocurrency transactions. The journey of PayPal started when Bitcoin was just around $400.
More Blockchain Investment
In 2019, PayPal Ventures made its first blockchain investment in Cambridge Blockchain. However, it was not until last year when the payment giant enabled crypto payments, which Square or Visa had done earlier that people started to recognize its longstanding interest.
The payment offering made PayPal one of the largest mainstream financial companies in the world to open its own network for cryptocurrencies. PayPal expected the service would likely spur a new bull run for crypto at that time.
Users who have Bitcoin, Ether, Bitcoin Cash and Litecoin in their PayPal digital wallet can convert into fiat currency at checkout. PayPal’s service won’t charge a transaction fee for paying with crypto, and users can only use one cryptocurrency per transaction.
The asset that is gaining the attention of investors has not yet become a widespread mode of payment, in part because the value of cryptocurrencies is always fluctuating, despite the fact that there have been a number of financial giants that have paved the road. PayPal aims to change that.
The firm has been very active in cryptocurrency, its approaches are always in line with the official rulings. With the expansion of digital-asset-related features, PayPal will always go hand in hand with regulators and government agencies and ensure the highest level of system stability and uniformity.
Dan Schulman, CEO and president of PayPal, also said in an interview that the firm was willing to support central bank digital currencies (CBDCs). According to him, CBDC was an inevitable trend, especially in the context that China experimented with a digital yuan.