PayPal Scores UK Crypto License
Global payment giant PayPal has secured regulatory approval from the Financial Conduct Authority (FCA) to offer cryptocurrency services within the United Kingdom. This registration, effective since October 31, 2023, marks a pivotal moment in PayPal’s crypto journey. It reflects both the evolving regulatory environment in the UK and PayPal’s strategic stance towards crypto assets.
The FCA’s decision places certain requirements and restrictions on PayPal’s financial services activities in the UK. Among these restrictions is the cessation of onboarding new customers and a limitation on existing customers’ crypto activities to holding and selling. The firm is now prohibited from expanding its current offering to encompass various crypto-related services, including participation in initial coin offerings, staking, peer-to-peer exchanges, and decentralized finance activities such as lending and borrowing.
This milestone makes PayPal the fourth entity to receive FCA’s crypto registration in 2023, following Interactive Brokers, Bitstamp, and Komainu. This accomplishment comes shortly after PayPal temporarily paused its UK customers’ ability to buy cryptocurrencies, citing the need to comply with the evolving regulatory framework.
The United Kingdom has been steadily asserting itself as a prominent player in the cryptocurrency ecosystem. Recent data shows that the UK leads Central, Northern, and Western Europe in raw transaction volumes, emphasizing its growing importance in the global crypto landscape. Furthermore, London has established itself as the world’s most crypto-ready city for business, according to a study by the crypto tax platform Recap.
PayPal’s journey into the UK’s crypto market also highlights the regulatory framework implemented under the Fifth Money Laundering Directive (AMLD5) since 2020. This directive mandated that businesses seeking to operate within the UK crypto space must notify the FCA and secure its approval.
The latest FCA registration allows PayPal not only to offer crypto services but also to validate its cryptocurrency-related marketing materials, in compliance with the latest industry standards. The new regulations impose penalties on entities that fail to comply, including substantial fines and imprisonment for promoting crypto assets to UK customers without adhering to the rules.
It’s important to note that PayPal has been actively expanding its crypto-related offerings throughout the year. The introduction of PayPal USD, a native, dollar-pegged stablecoin running on Ethereum, and the facilitation of crypto transfers to third-party wallets have been noteworthy steps in the firm’s crypto journey.