PayPal calls for clarity on digital currencies


#1

I just came across this article and I have to admit that I tend to agree with PayPal on this. Companies that are involved in financial transmissions should be definitely regulated and in compliance with anti-money laundering and anti-terrorism laws.

Bitcoin transactions between individual users shouldn’t be regulated — but businesses offering services based on Bitcoin and other digital currencies should be regulated in a similar manner to other payment services, PayPal has argued.

In a submission (PDF) to the Senate inquiry examining the regulation of digital currencies, including Bitcoin, in Australia, the company argued that it is “important to draw a distinction between digital currencies, versus the companies that trade or facilitate transactions in digital currencies”.

The submission states:

While the currency itself should not be regulated, and transactions by individual users without the assistance of intermediaries should not be regulated, companies that provide a financial service for digital currency transmission, for issuance or sale of digital currency, or for exchange with other currencies such as the Australian Dollar, should be regulated in a manner similar to the existing regulations that apply to other payment services.

Totally agree. This would not only aid towards the broader mainstream looking differently at cryptocurrencies or those that offer financial services but also protect us existing users from the everlasting dramas with crypto-exchanges and other merchants.(imho)


#2

I agree. This wild-west industry we’ve got now is fun, but it’s unregulated nature really makes for the kind of reputation that normal folks would never trust their hard-earned money to. Even we, who play in it every day, won’t convert more than we can afford to lose, because there’s no one to trust.


#3

Pfft, grow some testicles. Lol j/k.

I haven’t read the article yet, but what’s been said does make sense. I’ll take a look in a bit.


#4

Absolutely and it is a gate wide open for scammers and fraudsters and thiefs and so on.

I know that a lot of people in crypto are all about their privacy and freedom and “f…the system” and all that but the truth is that cryptocurrencies won’t be taken serious unless they go “legit” in the eye of the beholder, the mainstream.

A good example is the uproar that went across HT when GAW announced that Paybase will require customers to comply to industry standard KYC procedures. I found it rather entertaining how people are always screaming for transparency but when asked to be transparent themselves they throw up barricades and find it outrageous.

Personally I have nothing to hide, I’m on no watchlist (that I know about), I don’t sell arms, drugs and last time I checked I didn’t have a dead body in the closet. I don’t have a problem to verify my ID and address with a payment processor or for example a gaming site “if” the site itself holds the appropriate licence and is regulated. A company that requires it’s customers to verify their identity because they are required to do so by their regulator is a good thing. It means they are operating as they should and most likely they will have funky stuff like segregated accounts for customer funds and get audited regularly.

What I do like the most about the article is PayPal’s stance that the currency (or coin) itself or user-to-user transactions shouldn’t be regulated. That’s a strong statement.


#5

I wish more people understood this. At no point will cryptocurrency ever “do away with trust”, as so many claim. We will always have to trust the companies we choose to do business with. We will always have to trust the coin. I suppose it could be said that “cryptocurrency centralizes trust”, a statement sure to make the nearest crypto-anarchitst’s head explode. :smile:

Is it really any surprise that Paypal, a company with a large existing infrastructure for user verification, and a strong reputation for protecting that information, should want regulations put in place requiring their competitors to also verify user identities? The good folks at Paypal aren’t stupid, and they didn’t get to where they are by ignoring emerging technologies. I’m positive they recognize that block-chain technology has the potential to be a useful tool for their business. If I had to speculate, I’d say that Paypal wants to implement some form of cryptocurrency. I’d further speculate that implementing cryptocurrency in an existing financial powerhouse is much, much simpler than building a full business around a cryptocurrency. Asking that regulators put rules in place that Paypal is already equipped to follow puts them miles ahead of their competition.

Further, unregulated user-to-user transactions also serves Paypal. Money transfer companies like Western Union and Moneygram in the US are increasingly encroaching on Paypal’s territory. User-to-user cryptocurrency renders those companies obsolete, removing some potentially powerful emerging competitors from the equation. It also leaves us block-chain pioneers plenty of reason to keep tinkering, inventing any number of new things that Paypal can adopt later. :smile:


#6

I agree that there needs to be some form of regulation in this industry. I believe it will go a long way to reduce the amount of scams and witch hunts we have seen lately. When the playing field is level then every knows what to expect.


#7

That is really the only way it can be implemented seeing as the blockchain can be used by anybody that has a wallet. Only control on the edges and services can be regulated.


#8

Absolutely not and like I said doing business with a regulated and licensed company gives me a bit of additional comfort about dealing with them and more importantly them handling my money.

I would go as far as saying “they have been working on this for a while now” and I would also think it is okay to assume that they might be further in actually adoption or dealing with BTC than we might think. PayPal and many other companies tend to “do first and talk about it later” opposed to many companies we deal with in the Cryptoworld.

In addition it would be kinda hard for them to require user-to-user verification and compliance “if” they were to offer some sort of cryptocurrency service. The could sure oversee it on PayPal and enforce whatever rules they deem fit but the moment it’s in my QT I’ll send it to whomever I want.


#9

I think they have a good reason for that In that sense that they could buy out any competitor they see fit and don’t have to do anything to incorporate that user base. Another reason is to make it so much harder for competitors to get the full certification needed for being a money transfer agent. At the moment anyone can do that if it does not touch fiat.


#10

Yepp but a fiat interlink is badly needed and as always preferable as debit card, much thanks.


#11

Personally i have no love for Paypal and no love for their opinion on anything. They went from being a disruptive source in the world of finance to a part of the problem. What they want, imo, is the ability to freeze smaller players out by suggesting that there be a minimum legislation. As much as this “wild west” atmosphere is sometimes toxic and dangerous, even to the initiated, it is fast moving and it is in the turmoil and chaos that things get tried tested, abandoned or improved - case in point - open bazaar - a potential major headache for ebay, where transactions won’t be handled by centralised payment processors like paypal. That kind of thing in anathema to them, it’s potentially damaging to their business model and they know it.


#12

Don’t assume you aren’t on 'any lists".

The list “Potential Domestic Terrorist” pretty much includes everyone that owns a gun, has ever bought food storage or camping equipment beyond just a single sleeping bag, has been active duty military within the last 20 years, or - oops - has ever been associated with, or dealt in, cryptocurrencies.


#13

Right. Raising the cost of entry to your industry is just good business sense, if you can manage it. So is crushing or subsuming your competition before they get big enough to put up a fight. Regulations on point-of-sale cryptocurrency transactions do both for Paypal, while also legitimizing cryptocurrency to the masses and allowing big businesses to publicly push for adoption.


#14

Everyone is on a list. There’s no such thing as “off the grid”.


#15

Guess I can be glad that I’m not in the USA and that I’ve pretty much dropped of the German “grid” a good 20 years ago. The Spanish just don’t give a f… about what you do as long as you do it to yourself and not others.

One thing that has to be said though is that PayPal as at least never scammed anyone, they have 157 million active wallets, the service is available to 203 markets, they are processing over 10 million transactions per day and support 26 currencies.

So it can’t be really denied that we all would benefit from PayPal adding Bitcoin to their service (fees or not). At least they won’t do a runner with my money.

Just enter the Matrix, I’ll look after you :wink:


#16

Has never scammed anyone… Hmmmm. As a previous seller on eBay, and someone who had $27K USD locked in their account for 6 months due to doing someone a favor and selling them 0.5 BTC for Paypal, and as someone that has been scammed $18K USD on various bogus chargebacks by an organized group working inside of Paypal, I guess would very much disagree with that statement.


#17

Uhmm yeah. I would guess the disagreement would be even legit. The refund and charge-back “feature” of PayPal is one of the main reasons why I don’t use it much or only with people I know, to do Amazon or other purchases and so on.

I mostly use Skrill and Neteller for my online stuff whenever possible and I certainly “insist” on using one of them when I do P2P crypto trades. Both processors have debit cards but the difference to PayPal is that all transactions are final which means that once I’ve received a payment it’s mine!

Funny enough I did manage to receive some money back once rom Skrill after I had blindly run into a scam myself. Of course it was a BTC trade and of course the “exchange” site was a scam. If I hadn’t had my account with them for years and if I hadn’t instantly called them and made a solid case the money would have been gone for good. Fortunately to me the CS agent acted first and asked questions later by temporarily freezing the other Skrill account.


#18

Well I must admit I use Paypal a lot but only as a buyer not a seller. And now that I hear some of the horror stories I will never use them as a Seller. But you must admit that Paypal as a buyer is very good. And if they integrate GoCoin and GoCoin accepts XPY then a big market will open for XPY.


#19

I also recently read (somewhere) that PayPal has changed their Buyer/Seller Protection policy on digital goods. However, I do not know what they changed since I wasn’t able to trace back the source.

Does anyone know what they changed exactly? Is it better for the buyer or the seller or was it just a general change to their digital goods policy?

[quote=“Daffy, post:18, topic:144”]
Well I must admit I use Paypal a lot but only as a buyer not a seller.[/quote]

I barely use them. Mainly for gaming purposes and random payments and I usually don’t hold a balance with them. However PayPal recently made their MasterCard available to Spanish customers so I ordered one and added PayPal to my BTC/USD P2P portfolio “for friends”.


#20

I do not trust the eBay / Paypal selling model in the least. It is too easy for people to make negative claims, causing you to lose your shorts in the process.