Payment behemoth PayPal has officially registered with the U.K. Financial Conduct Authority (FCA) as a provider of crypto services. This significant update was confirmed on the regulator’s website. PayPal UK Limited, now listed in the registry, is authorized to undertake specific cryptoasset-related activities in the region. This authorization is in line with the requirement for companies in the U.K. offering crypto services to gain approval and adhere to the FCA’s stringent anti-money laundering protocols.
Additionally, this registration facilitates PayPal in endorsing its crypto-centric communications, aligning with the newly established marketing guidelines. It’s worth noting that to align with these regulations, PayPal had previously suspended crypto transactions in the U.K. temporarily.
Restrictions and requirements outlined by FCA
According to the FCA’s official records, the approval granted to PayPal comes with specific stipulations regarding the financial services it can provide. For instance, PayPal is restricted from expanding its existing crypto offerings. Such limitations encompass a range of services, including cryptocurrency exchange services, participation in initial coin offerings, staking, and decentralized finance functionalities, such as lending and borrowing. Moreover, the FCA’s directives also mention that PayPal should refrain from adding new customers and can only allow its current users to hold and sell functionalities. Notably, PayPal stands as the fourth entity to secure the FCA’s crypto registration this year, joining the ranks of Interactive Brokers, Bitstamp, and Komainu. This achievement for PayPal follows its decision to briefly halt its U.K. users from purchasing cryptocurrencies like Bitcoin in the earlier part of October. PayPal had communicated in August its intention to be compliant with the country’s evolving regulations.
The U.K., in recent times, has been establishing its position as a dominant player in the cryptocurrency arena. Reports from October 2023 by blockchain analysis enterprise Chainalysis highlighted the U.K.’s prominence in the crypto sector, particularly concerning raw transaction volume across Central, Northern, and Western Europe. Furthermore, a February 2023 study conducted by the crypto tax platform Recap identified London as the globe’s leading city in terms of crypto readiness for businesses.
As the U.K. continues to be a significant hub for cryptocurrency activities, it remains crucial for major players like PayPal to navigate the regulatory landscape effectively, ensuring secure and compliant operations for their user base. However, with the FCA’s clear guidelines and the proactive approach of companies in the sector, the future of crypto in the U.K. looks promising.