Global payment leader, PayPal, has recently secured the green light from the Financial Conduct Authority (FCA) to provide cryptocurrency services in the United Kingdom. This is a significant development for the UK’s crypto scene, and it could pave the way for wider adoption of digital assets in the country.
Great news, right? But before you start celebrating, read through all the details so you’re well informed. Dive in!
Securing the Seal of Approval
According to official data from the FCA, PayPal obtained its registration to engage in “specific crypto asset activities” in the UK on October 31, 2023.
The FCA has outlined certain restrictions and requirements for PayPal concerning its financial service operations.
“This includes, but is not limited to, ceasing onboarding new customers and restricting existing customers to hold and sell functionality,” the information on the FCA register reads.
Also Read: PayPal Launches Cryptocurrencies Hub: Here’s Your Complete Guide
But… What Does This Mean?
The limitations imposed on PayPal’s cryptocurrency services in the UK signify that they are currently not permitted to accept new customers and can only offer limited features to existing ones, namely the ability to hold and sell crypto assets.
These measures are most likely in place to ensure adherence to regulatory standards and safeguard consumers within the fast-paced world of cryptocurrencies.
“The firm cannot expand its current offering in crypto assets,” the register notes, adding that it’s “including, but not limited” to crypto exchange services, participation in initial coin offerings, staking, peer-to-peer exchange, and decentralized finance activities such as lending and borrowing.
UK’s Crypto Scene is Thriving
The United Kingdom has been notably establishing itself as a significant player in the cryptocurrency arena.
According to a report from blockchain analytics firm Chainalysis in October 2023, the UK is taking the lead in Central, Northern, and Western Europe when it comes to the sheer volume of cryptocurrency transactions. Furthermore, a study conducted by the crypto tax platform Recap crowned London as the most cryptocurrency-friendly city for businesses back in February 2023.
Read More: UK Crypto Regulations: What Firms and Investors Need to Know
Factors Behind the Growth
The flourishing cryptocurrency industry in the United Kingdom can be attributed to several factors, including favorable regulatory frameworks and increasing acceptance among both businesses and individuals.
In addition to these factors, London’s thriving fintech ecosystem has played a pivotal role in enhancing the city’s status as a global hub for cryptocurrency-related activities.
PayPal Joins the Ranks
PayPal reportedly became the fourth firm to receive the FCA’s crypto registration in 2023 after Interactive Brokers, Bitstamp, and Komainu. The license acquisition comes shortly after PayPal briefly paused the ability for its U.K. customers to buy cryptocurrencies like Bitcoin in early October. The firm declared in August that it was working to comply with new regulations in the country.
