PayPal Confirms Joining Coinbase’s TRUST Network
- PayPal has decided to join hands with the crypto exchange giant Coinbase to comply with the financial industry’s Travel Rule.
- PayPal will endeavor to improve adherence to the so-called Travel Rule, which the Bank Secrecy Act mandates of U.S. financial institutions, together with the rest of the TRUST network.
American multinational financial technology company PayPal has decided to join hands with the crypto exchange giant Coinbase to comply with the financial industry’s Travel Rule.
On Monday, Coinbase shared the announcement through a blog post where it revealed that the leading payments company has partnered with Coinbase to use its Travel Rule Universal Solution Technology (TRUST) network.
PayPal will endeavor to improve adherence to the so-called Travel Rule, which the Bank Secrecy Act mandates of U.S. financial institutions, together with the rest of the TRUST network.
When users make transactions totaling more than a certain amount, this rule dictates that financial institutions communicate information about them. The major collaboration on regulatory compliance clearly signals PayPal’s efforts to be in line with the American regulators.
Notably, Coinbase’s TRUST is a “global, industry-driven solution designed to increase compliance with a requirement known as the Travel Rule while prioritizing the security and privacy of customers.”
It aims at disclosing the necessary data while safeguarding user privacy. By adopting a compliance and risk management solution from Exiger, it will avoid using a centralized database for user data and guarantee the reliability of its members.
The TRUST network has rapidly expanded recently, despite having only 18 members in February. Alongside Coinbase, a number of major cryptocurrency exchanges, including Binance.US, Crypto.com, Gemini, and Kraken, are a member of TRUST.
The USDC issuer Circle, the asset manager Fidelity Digital, the stock and cryptocurrency trading software Robinhood, and the cryptocurrency lender Nexos are some more companies participating in the network. Interestingly, with PayPal’s decision to join TRUST, the group now has 38 members.
PayPal’s expansion and increased compliance requirements
In October 2020, the payments firm officially entered the crypto space by offering crypto trading services on its platform. In February 2022, PayPal confirmed its intention to establish its own U.S. dollar-backed stablecoin, PayPal Coin, when developer Steve Moser spotted an in-house stablecoin in the source code of its iPhone app.
“We are exploring a stablecoin; if and when we seek to move forward, we will, of course, work closely with relevant regulators,”
Jose Fernandez da Ponte, PayPal’s SVP of crypto and digital currencies, said at the time.
Moreover, In the same month, the fintech behemoth also announced the creation of a team of industry experts to work as advisors on crypto, blockchain technology, and digital currencies.
This summer, it added even more functionalities, starting in June with the ability for users to withdraw and deposit cryptocurrency.
Since PayPal now offers a greater array of crypto functions, it probably needs to comply with regulations more strictly. PayPal’s move to join Coinbase’s network will probably help it in this regard.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
