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MetaMask has over 20 million monthly users and reports that it has facilitated more than $10 billion worth of peer-to-peer transactions since its inception. Through its platform of services and related partners, it also connects its users with over 3,700 applications, with various financial options.
Therefore, the September 5 announcement that users of MetaMask wallets can now freely sell cryptoassets for fiat and off-ramp these funds through various financial institutions – including PayPal – is a noteworthy step for the industry as a whole.
Over the past month, with the launch of PayPal’s PYUSD stablecoin, and now with this announcement from MetaMask, hundreds of millions of users have gained greater access to crypto-fiat opportunities than ever before. Also notable is the fact that every regulated financial institution that is “not dealing in cryptocurrency” is much closer than ever before to the risks and benefits that this asset provides.
However, one concern that comes to mind with the MetaMask announcement is, “Where’s the KYC?”
MetaMask prides itself on being a seamless means through which market participants can easily trade cryptocurrencies without going through a supposedly invasive know-your-customer (KYC) process. Is it possible that millions of customers and various institutions can now potentially receive funds from MetaMask wallets without the benefit of KYC information?
Compliance
In reality, while MetaMask allows people to create self-hosted software wallets that can receive and send crypto pseudonymously, any fiat on-or-off-ramp activity is still subject to the same KYC requirements as any other regulated financial activity in the payments space. .
By receiving funds in the MetaMask wallet, users undoubtedly have the ability to freely move funds on-chain without the mediation of a centralized third party and without KYC. This goes a long way towards realizing the cryptonist dream of uncensored p2p value transfers, without any restrictions from governments or banks. This dream, however, must be tempered by reality.
Buying and selling cryptocurrencies for fiat money through MetaMask requires going through one of its partner organizations, all of which must comply with relevant legal and regulatory requirements and none of which can simply wash their hands of KYC because it seems intrusive or inconvenient for users .
Users will be subject to the same KYC requirements as if they were transacting through a traditional money transmitter. There is no free lunch and no way to avoid responsibility for conducting financial transactions in accordance with the expectations of state and federal regulators overseeing the sector.
Business as usual
So, can anyone argue that millions of MetaMask users without KYC can now buy and sell cryptocurrencies with and for fiat? Well, in the most literal terms, of course. However, in order for those users to complete the process of purchasing cryptocurrencies using fiat dollars, transferring funds to an exchange account they control, or selling cryptocurrencies for cash, they must be prepared to submit to the same regulatory requirements as everyone else.
Despite the crypto winter, progress is being made. The practical use of cryptocurrencies is slowly advancing. The announcements by PayPal and MetaMask represent some of the larger doors that have been opened for consumers and that there is a viable path forward for integration between traditional and decentralized financial systems.
While this news may not be earth-shattering, it is nonetheless an important step towards a safe and sound crypto ecosystem that can play nice with banks and money transmitters.
Compliance Financial Services Global
