According to PayPal, bitcoin transactions should not be regulated between individual users. PayPal went on to specify that businesses providing services that are based on bitcoin as well as other types of digital currencies should be regulated similarly to the manner in which other payment services are regulated.
As a digital wallet provider that accepts numerous types of currency, PayPal has argued that they are already sufficiently regulated by laws already in existence. PayPal's immediate concern seems to be the potential for being caught up in any legislation aimed at digital currencies. These comments were made during a recent submission to the Senate as part of an inquiry made for the purposes of examining digital currency regulation in Australia.
The Australian Senate inquiry regarding digital currencies was first established in October of last year. The inquiry followed guidance issued by the Australian Taxation Office indicating that the GST will be charged in the event that businesses receive or supply bitcoins in exchange for services or goods.
Bitcoin-based business representatives as well as cryptocurrency advocates have appeared as witnesses during the inquiry, arguing that digital currencies such as Bitcoin should be treated as currency and not as a commodity for the purposes of taxes.
PayPal makes the move to offer bitcoin payments
While many online retailers, including Overstock, have made the move to accept bitcoin as a form of payment, PayPal has remained hesitated about adding bitcoin as a type of currency due to a lack of clarity related to the relation of digital currencies.
Recently; however, PayPal has announced that agreements have been made with Coinbase, BitPay, and GoCoin as a method for integrated support for the acceptance of bitcoin payments for the purchase of digital goods and services. Such an announcement is significant to the bitcoin industry, as many have wondered if PayPal would ever wade into the waters of digital currency.
PayPal is working through Braintree to be able to accept bitcoin as a payment option via mobile devices and through their innovative v.zero SDK and relationship with Coinbase. 1
PayPal and bitcoin offers numerous advantages to consumers and merchants
While there are still details that will need to be worked out regarding how bitcoin will be integrated into PayPal, the impact that should a move could have on the industry is already making news. Both consumers and merchants could benefit tremendously from such an integration. For instance, merchants would be able to provide their customers with an additional payment option that would be able to exist within their current checkout process without the need to add something new. Consumers would also be able to benefit by being able to take advantage of even more places where they can spend their bitcoin. By integrating bitcoin, PayPal will also make it possible for consumers to send funds in a low-cost manner on a global scale.
Bitcoin and PayPal actually have numerous similarities in that they both set out to achieve many of the same goals, including the ability to allow anyone in any location the ability to send funds in a relatively inexpensive manner.
Rather than utilizing a single launch partner, PayPal will instead launch their integration of bitcoin with multiple partners. At the moment, the integration is only in North America. Even so, it serves as a massive endorsement for bitcoin and the digital currency community as a whole. Transaction revenue will be earned by PayPal through referral fees. In that regard, PayPal is serving as an intermediary.
As part of their most recent request for clarification regarding bitcoin, PayPal has recommended that digital currencies should be regulated and defined in a clear manner and that furthermore, they should be recognized as financial instruments.
1) PayPal. PayPal and Virtual Currency.