PayPal joins Coinbase’s TRUST network

PayPal has joined Coinbase’s TRUST network to comply with the financial industry’s travel rule.

PayPal joins the TRUST network

PayPal works with Coinbase on regulatory compliance.

According to a statement from Coinbase on August 22, the payments giant has joined Coinbase’s Travel Rule Universal Solution Technology (TRUST) network.

With the rest of the TRUST network, PayPal will work to increase compliance with the so-called travel rule required of US financial institutions under the Bank Secrecy Act. This rule requires financial institutions to share information about customers when those customers make transactions above a certain amount.

Coinbase’s TRUST network aims to reveal the necessary data while protecting user privacy. It will avoid using a central storage of user data and ensure that members are reliable through a compliance and risk management solution from Exiger.

Although the TRUST network only had 18 members in February, it has grown rapidly in recent months. PayPal’s decision to join TRUST brings the group’s membership to 38.

Several top crypto exchanges, such as Binance.US, Crypto.com, Gemini and Kraken, are involved in TRUST along with Coinbase. Other firms involved in the network include USDC issuer Circle, investment manager Fidelity Digital, stock and crypto trading app Robinhood and crypto lender Nexos.

PayPal introduced cryptocurrency trading in October 2020. This summer, it further expanded these features, allowing customers to withdraw and deposit crypto for the first time in June.

Presumably, PayPal’s growing array of crypto capabilities means it needs to comply with regulations more extensively, and the decision to join Coinbase’s network is likely to help it in that regard.

Disclosure: At the time of writing, the author of this piece owned BTC, ETH and other cryptocurrencies.