Payment giant PayPal has been given the green light by the Financial Conduct Authority (FCA) to offer cryptocurrency services in the United Kingdom. According to official data from the FCA, PayPal has been registered to provide “certain crypto asset activities” since October 31, 2023.
However, there are specific requirements and restrictions that PayPal must adhere to when conducting its financial services activities. These limitations include ceasing the onboarding of new customers and restricting existing customers to only hold and sell cryptocurrencies. The FCA register states that PayPal is not allowed to expand its current offering in the crypto assets space. This restriction encompasses crypto exchange services, participation in initial coin offerings, staking, peer-to-peer exchange, and decentralized finance activities such as lending and borrowing.
Obtaining FCA registration positions PayPal as the fourth firm to receive such approval in 2023, alongside Interactive Brokers, Bitstamp, and Komainu. This achievement comes shortly after PayPal temporarily halted the ability for its UK customers to purchase cryptocurrencies like Bitcoin in early October. The company had confirmed in August that it was working towards complying with new regulations in the country.
The United Kingdom has emerged as a prominent player in the cryptocurrency economy. According to a report by blockchain analytics firm Chainalysis in October 2023, the UK ranks at the top in terms of raw transaction volume in Central, Northern, and Western Europe. Additionally, a study by crypto tax platform Recap found that London was the world’s most crypto-ready city for business in February 2023.
The approval from the FCA enables PayPal to tap into the growing demand for cryptocurrencies in the UK. With established infrastructure and a wide user base, PayPal is well-positioned to capitalize on the country’s thriving crypto market. As more individuals and businesses embrace digital assets, PayPal’s entry into the crypto space will likely facilitate greater accessibility and mainstream adoption.
It is important to note that while PayPal can now offer crypto services in the UK, the company is still subject to regulatory limitations. These restrictions ensure that consumer protection measures are in place and that the company operates within a compliant framework.
The FCA’s decision to grant PayPal registration further highlights the increasing acceptance of cryptocurrencies in traditional financial institutions. As the sector continues to evolve, more established players are recognizing the potential benefits of incorporating digital assets into their offerings. The FCA’s oversight ensures that these institutions operate responsibly and adhere to regulatory standards.
Given the momentum of the crypto market in the UK, PayPal’s entry into the space is likely to be well-received. The ability to buy, hold, and sell cryptocurrencies through a trusted and widely-used payment platform could potentially encourage more individuals to explore and invest in digital assets. As the cryptocurrency landscape continues to evolve, it will be interesting to see how PayPal’s presence in the UK market shapes the overall adoption and perception of cryptocurrencies.