Canonical crypto regulator, the New York State Department of Financial Services (DFS) has granted the first “conditional BitLicense” to PayPal for a partnership with Paxos Trust Company enabling customers to buy and sell cryptocurrencies.
DFS said Wednesday it was making good on a promise last year from Superintendent of Financial Services Linda A. Lacewell to take a fresh look at its regulatory framework for virtual currencies, with a view to fostering innovation in New York State.
“DFS’s approval today follows our June 2020 announcement for a new framework for a conditional Bitlicense to encourage, promote, and assist interested institutions to have a well-regulated way to access the New York virtual currency marketplace in a way that is both timely and protective of New York consumers, through partnerships with New York authorized virtual currency firms,” said Lacewell in a statement.
“DFS will continue to encourage and support financial service providers to operate, grow, remain and expand in New York and work with innovators to enable them to germinate and test their ideas, for a dynamic and forward-looking financial services sector, especially as we work to build New York back better in the midst of this pandemic,” she said.
Now with the DFS’s approval, New York State-chartered Paxos will be able to provide trading and custodial services to PayPal to allow the fintech giant’s 325-plus million customers to buy, sell, and hold cryptocurrency. Four DFS-approved digital assets will be initially available: bitcoin, bitcoin cash, ether and litecoin, according to the DFS statement.
CoinDesk first reported PayPal was planning a move into crypto back in June of this year, citing anonymous sources. A month later, CoinDesk reported that Paxos had been selected to support PayPal in its crypto endeavors.
Since 2015, DFS has approved 26 entities to engage in virtual currency business activity in New York State, including today’s announcement.