Another Robinhood? PayPal's compliance and security card: Wallets can only be used to buy cryptocurrencies, not for transfers between users, and definitely not for withdrawals.

Last night (22), PayPal announced that it will enable online wallet support for buying, selling, and holding cryptocurrencies, sparking heated discussions. The following are the key points summarized by ChainNews:

Ownership, Not Freedom: Cryptocurrencies That Cannot Be Transferred Out

According to current regulations, PayPal users can only hold the cryptocurrencies they purchase on PayPal's online wallet and are not allowed to transfer them to other users.

Jake Chervinsky, General Counsel at the decentralized lending platform Compound, pointed out that the real issue lies in users not being able to self-custody. He mentioned that this is actually unnecessary from a compliance perspective and he would be willing to discuss this with PayPal's legal team.

This is the highlight of the PayPal news for me.

They're not only preventing withdrawals to self-custody, they won't even allow transfers between accounts.

I'd be glad to speak with @PayPal's legal team about why these restrictions aren't required for regulatory compliance. pic.twitter.com/DIVUqkCkGC

— Jake Chervinsky (@jchervinsky) October 21, 2020

Many netizens responded that what PayPal is currently doing is similar to the brokerage service provided by online broker Robinhood. Chervinsky agreed with this view, suggesting that this may just be the first step, and in the future, users may be allowed to transfer cryptocurrencies out with restrictions, similar to what Jack Dorsey's payment company Square is doing.

However, at least PayPal's future plans involve payments, offering cryptocurrency applications compared to online brokers like Robinhood and eToro. The actual development in 2021 remains to be seen. Overall, this year's pandemic and the political and economic situation have accelerated the development of the digital economy, with cryptocurrencies or digital currencies being considered by many governments and businesses.