This excerpt taken from the EBAY 10-Q filed Jul 28, 2006.
Other Current Assets
Customer accounts include liquid assets set aside for certain customer liabilities as required in conjunction with PayPals Electronic Money Institution license from the United Kingdoms Financial Services Authority. The customer accounts represent claims on PayPals U.K. subsidiary and may be invested only in specified types of liquid assets. These assets are included on our balance sheet as current assets with an offsetting current liability in funds payable and amounts due to customers. All customer funds held by PayPal as an agent or custodian are for the benefit of its customers and, accordingly, are not reflected in our condensed consolidated balance sheet. These balances include funds held in the U.S. that are deposited in accounts insured by the Federal Deposit Insurance Corporation.