Regulation will keep PayPal’s new crypto services from looking anything like crypto

Earlier today, PayPal confirmed that it would be adding crypto payments to its global platform over coming months.

The rollout will begin in the United States, where PayPal also became the first recipient of the New York Department of Financial Services’ (NYDFS) conditional Bitlicense, a program that the regulator announced this past summer.

The devil in the details

While the news is huge for crypto, PayPal will be under intense scrutiny. The nature of the conditional Bitlicense is that conditional licensees have to pair off with firms that have full Bitlicenses (in this case, Paxos) who will act as mentors of a sort. Per the NYDFS, conditional licensees also “may be subject to heightened review, whether in regard to the scope and frequency of examination or otherwise.”

The conditional license lasts for two years, and its renewal or upgrade to full Bitlicense status is wholly contingent on Superintendent Linda Lacewell’s decision.

Representatives for PayPal declined to comment on what form heightened scrutiny will take, instead directing Cointelegraph to speak with NYDFS. In turn, representatives for NYDFS declined to specify what “heightened review” might mean for PayPal beyond the vague statutory language already available.

Meanwhile, representatives for Paxos declined to comment on their role in PayPal’s conditional Bitlicense. Which is to say, all three of these organizations made great efforts to publicize this morning’s news without going into detail on the regulatory arrangement. Their disinterest in doing so when pressed is concerning.

Crypto is as crypto does

While nobody is being transparent about the specific hoops that PayPal — which has well over 340 million users worldwide — will have to jump through to satisfy regulators, the firm is clearly going to have to do everything in its power to make crypto behave unlike crypto on its platform, beyond the customer data gathering that PayPal has always done.

PayPal’s wallet will be not only…

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