PayPal Seeks A Clear Regulatory Distinction Between Bitcoin Payments and Blockchain Applications

NEW YORK (InsideBitcoins) – PayPal is attempting to draw the line between digital wallets and digital currency. The company’s inquiry submitted to the Australian Senate in late December, and recently made public, reveals a good deal of PayPal posturing. In order to avoid any fallout regulation, the giant payment processor seeks the governing body to make clear distinctions between the many facets of digital currency technology.
Among requests for clear definitions were recommendations that PayPal’s digital wallets be held separate from digital currencies and that blockchain-based applications don’t fall under the same regulation as bitcoin.
‘It is important to understand that a PayPal account (sometimes referred to as a Digital Wallet) is NOT a digital currency and therefore should not be captured under any definition of what constitutes a digital currency,’ PayPal said in the inquiry.
Referencing partnerships with BitPay, Coinbase and GoCoin, the company outlined their decision in September to integrate bitcoin within their subsidiary Braintree and their PayPal Payments Hub. PayPal believes digital goods merchants will be excited to sell their merchandise and get paid in bitcoin, but they want the Australian Senate to understand that they have not directly integrated bitcoin into their digital wallet platform.
‘It must be emphasised to the Senate Inquiry that PayPal’s announcement does not mean that PayPal has added Bitcoin as a currency in our digital wallet in the US or that Bitcoin payments will be processed on the PayPal payments platform,’ they said. ‘At this stage, consumers will not be able to store Bitcoins in their PayPal digital wallets.’

This post was published at Inside Bitcoins on Jan 13, 2015.