PayPal is working together with Coinbase in the name of regulatory compliance.
Based on Coinbase’s statement on August 22, the payments giant has joined Coinbase’s TRUST network (Travel Rule Universal Solution Technology) to improve adherence to the proclaimed Travel Rule — which is required of US financial institutions under the Bank Secrecy Act.
When clients make transactions over a specific amount, the rule will mandates that financial institutions share information about such clients.
The TRUST network of Coinbase seeks to release the required information data while maintaining user privacy. By adopting a compliance and risk management solution from Exiger, it will avoid the centralized storage of user data and guarantee the reliability of its members.
The network has been rapidly growing in the recent months. With the addition of PayPal, there are currently 38 members in TRUST network — in comparison to merely 18 members back in February.
Coinbase’s TRUST network was involved with multiple top crypto exchanges like Crypto.com, Binance.US, Kraken, and Gemini. Other firms such as USDC issuer Circle, the stock and crypto trading app Robinhood, crypto lender Nexos, and investment manager Fidelity Digital, are also collaborating with the network.
In October 2020, PayPal launched cryptocurrency trading. It added more functionality from June onwards, with the ability to enable the clients to withdraw and deposit crypto.
Since PayPal is offering a wide range of crypto features, it probably needs to comply with the regulations more strictly. PayPal’s move to join Coinbase’s network will likely assist it in that regard.
