PayPal secures NY DFS conditional Bitlicense
PayPal, Inc. has become the first company to receive a conditional Bitlicense from the New York State Department of Financial Services (DFS).
PayPal, in partnership with Paxos Trust Company, has launched a new service enabling its customers to buy, sell and hold certain cryptocurrencies. Paxos, a New York State chartered trust company, will provide cryptocurrency trading and custodial services to PayPal for the benefit of PayPal customers.
Superintendent of Financial Services Linda A. Lacewell explains:
“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”.
This announcement follows Superintendent Lacewell’s public comments approximately one year ago at DC Fintech week, when she promised to take a fresh look at DFS’ regulatory framework for virtual currencies. Since that time, and during the 5th year anniversary of DFS’ virtual currency licensing framework, DFS has taken a series of steps to update its approach, including guidance for companies to adopt new coins, a proposed conditional licensing framework, and additional informational resources for applicants and licensees. These efforts aim to help emerging, nascent, and seasoned firms to start, enter, and grow in New York.
Dan Schulman, president and CEO, PayPal, commented:
“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.”
With the DFS’ approval, New York State chartered Paxos will be able to provide trading and custodial services to PayPal to enable PayPal customers to buy, sell, and hold, virtual currency. Four DFS-approved virtual currencies will be initially available: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
Since 2015, DFS has approved 26 entities to engage in virtual currency business activity in New York State, including today’s announcement.