Paypal gets first ‘Bitlicense’ in New York

Technology

FILE – This Wednesday, Jan. 19, 2011 file photo shows an exterior view of eBay/PayPal offices in San Jose, Calif. PayPal is pulling out of Facebook’s digital currency project, known as Libra, a blow to the social media company that has faced stronger-than-expected scrutiny over its proposed creation of an alternative payments system. The digital payments company said Friday, Oct. 4, 2019 it is withdrawing from the Libra Association and focus on its existing businesses. (AP Photo/Paul Sakuma, File)

NEW YORK (WWTI) — Paypal has officially become the first entity to be approved for a conditional Bitlicense in New York. The state’s Superintendent of Financial Services, Linda Lacewell, officially announced that Paypal, was approved by her Department of Financial Services.

“DFS’ approval today follows our June 2020 announcement for a new framework for a conditional Bitlicense to encourage, promote, and assist interested institutions to have a well-regulated way to access the New York virtual currency marketplace in a way that is both timely and protective of New York consumers, through partnerships with New York authorized virtual currency firms,” Lacewell said. “DFS will continue to encourage and support financial service providers to operate, grow, remain and expand in New York and work with innovators to enable them to  germinate and test their ideas, for a dynamic and forward-looking financial services sector, especially as we work to build New York back better in the midst of this pandemic.” 

According to the DFS, PayPal will partner with Paxos Trust Company to launch new services, enabling customers to buy, sell, and hold certain virtual or cryptocurrencies. Approved virtual currencies include Bitcoin, Bitcoin Cash, Ethereum, and Litecoin. With DFS approval, New York State-chartered Paxos will provide trading and custodial services to PayPal users.

“We are proud to become the first company to receive a conditional virtual currency license from the New York State Department of Financial Services,” said PayPal CEO and President Dan Schulman. “This approval represents an important step forward in our goal to contribute to the evolution of the regulatory framework for digital currency and help our consumers safely and responsibly engage with cryptocurrencies.” 

Including the announcement made on October 21, the DFS has approved 26 entities to engage in virtual currency business activities in New York.

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