PayPal Converts Conditional Virtual Currency License to Full BitLicense

The payments giant announced it would let users withdraw their crypto holdings to their own wallets earlier today.

AccessTimeIconJun 7, 2022 at 6:53 p.m. UTC
Updated Jun 7, 2022 at 7:38 p.m. UTC

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

PayPal (PYPL), a payments firm that’s offered crypto buy and sell options since 2020, is the newest recipient of New York’s landmark virtual currency license.

The company, which already offered crypto services in New York through a partnership with stablecoin issuer Paxos, has had a conditional license in the state since October 2020, when it first announced it would allow its customers to buy or sell cryptocurrencies. The company has now successfully converted its conditional license to a full one.

The New York Department of Financial Services (NYDFS), which oversees the licensing regime more popularly known as the BitLicense, has issued more than 20 licenses to date. The agency announced PayPal’s conversion Tuesday.

NYDFS Superintendent Adrienne Harris told CoinDesk that her agency is “committed to keeping New York at the center of responsible technological innovation and forward-looking regulation” in a statement.

“The conditional virtual currency license allows businesses to have well-regulated access to the New York marketplace through partnerships with licensed firms, ensuring that New Yorkers have access to a wide variety of virtual currency products with appropriate consumer protections,” she said. “With PayPal’s conversion to a BitLicense, the conditional license is now a proven framework for licensure.”

PayPal SVP of Regulatory and Customer Compliance Andrea Donkor told CoinDesk in an email that "the future of safe and responsible innovation in crypto requires strong partnership between regulators and industry. The NYDFS’ leadership has been critical in enabling PayPal to continue to responsibly provide greater inclusion and access to our customers."

Earlier on Tuesday, PayPal announced it would also let its customers withdraw their cryptocurrency holdings to private or other third-party wallets. Previously, the company employed a walled garden, only allowing customers to buy or sell directly to fiat.

PayPal Senior Vice President of Blockchain, Crypto and Digital Currencies Jose Fernandez da Ponte told CoinDesk the move was in response to user demand.

“We’ve also been very vocal from the beginning that we’re in this because we are a payments and commerce company, and we think that our role in the ecosystem is about increasing access,” he said.

UPDATE (June 7, 19:38 UTC): Added statement from PayPal.

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Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

CoinDesk - Unknown

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.