PayPal confirms it is seeking to enter the crypto market
Citing its 22 years’ worth of industry experience, 300mn active user accounts around the world and enduring mission to democratise access to the digital economy, the company declared that it welcomed the Commission’s investigation on how best to integrate cryptocurrencies.
“PayPal prides itself in serving as a reliable partner to not only consumers, merchants and business partners, but also to policymakers, regulators and law enforcement,” it said in the letter.
“We appreciate the opportunity to share our initial thoughts and look forward to further participation in upcoming discussions regarding a regulatory framework for blockchain, distributed ledger technology and crypto-assets.”
Realising crypto’s potential
Noting the unprecedented growth of the global cryptocurrency market in the last three years, PayPal highlighted to the Commission that the potential benefits of decentralisation, increased stability and digital currencies in general were worth exploring.
“PayPal is continuously monitoring and evaluating global developments in the crypto and blockchain/distributed ledger space,” it continued.
“Of particular interest for us is how these technologies and crypto-assets can be utilised to
achieve greater financial inclusion and help reduce/eliminate some of the pain points that exist today in financial services.”
The company also indicated that many current issues surrounding transparency and compliance could be overcome via crypto.
As such, PayPal recommended three fundamental principles to underpin the development of a framework for managing crypto assets:
- Establish clear definitions for assorted crypto activities to encourage integral licensing and regulatory standards. If one of the primary benefits of crypto is transparency, this aspect cannot be overlooked, it argued.
- Following on from the first point, PayPal advocates that similarly stringent measures be introduced on a national and supra-national level.
- With the tech sector evolving fast, the company posits that regulatory frameworks should maintain a neutral status to allow innovation and fair competition to flourish. Doing so is likely to accelerate the increasing sophistication of underlying crypto tech.
Monitoring crypto’s progress
“As an innovative FinTech [sic] company and by virtue of its mission, PayPal is monitoring the evolution of the crypto-asset space,” said the letter in its closing remarks.
Stating that it had signed a non-binding letter of intent with the - a conceptual blockchain-based digital currency proposed by Facebook - in 2019, PayPal further noted that it had subsequently and without prejudice ended its association.
The reason given was the company’s own heightened developments and enquiries into the field, which rendered an external collaboration unnecessary.
As such, PayPal ended by stating that its ongoing goal remains “to continue to focus on advancing our existing mission and business priorities to democratise access to financial services.”
Nymbus enters strategic partnership with Plaid
Nymbus, a leading provider of banking technology solutions, has partnered with Plaid, a data network powering the digital financial ecosystem, to more instantly authenticate and fund customer bank accounts for financial institutions.
This new integration will allow Nymbus bank and credit union clients to securely onboard new users in a matter of seconds, which in turn translates to more active and engaged banking experiences. Plaid’s data network enables consumers to connect their financial accounts at over 11,000 institutions globally to more than 5,000 digital finance apps, including leading payments, investing, and budgeting tools.
What are the benefits of the integration?
Benefits of the Nymbus and Plaid integration for financial institution customers include:
- Improve user identity verification and reduce fraud.
- Instantly authenticate and link members’ bank accounts.
- Streamline ACH transfers between any bank or credit union in the US.
- Access and analyse comprehensive transaction data.
- Validate real-time account balances to protect against overdraft and enable account pre-funding.
“As more consumers than ever before rely on digital finances for their everyday lives, financial institutions need to meet their customers where they are while supporting safe and reliable money management experiences,” said Sarah Howell, Chief Alliance Officer at Nymbus. “Our expanding network of partners are important contributors to Nymbus’ combined portfolio of the technology, people and process available to quickly innovate with new routes to market and revenue streams.”
Continuous growth and expanding partnerships
Founded in 2015, Nymbus has continued to grow. Most recently the company has closed a new round of financing led by the Curql Fund. The US$5 million investment will be used towards Nymbus CUSO and accelerate a shared commitment to breakthrough technology for ensuring continued growth and stability for the credit union community.
Nymbus CUSO was founded in March 2021 to help break through barriers to growth, and its mission is to connect credit unions with trusted fintech offerings that both simplify technology delivery and enable new digital revenue opportunities.
Last year Plaid set a goal to move 75% of its traffic to APIs by the close of 2021, calling it “one of our top priorities as the industry moves full-steam ahead toward a fully digital financial system.”
Recently it has announced an open finance partnership with Capital One, a digital finance innovator, and the successful completion of its migration to the Capital One API. They have also completed or have in-motion data access agreements with major US financial institutions, including U.S. Bank, JPMorgan Chase, Wells Fargo, and others.