PayPal Secures Approval from FCA for Cryptocurrency Services in the UK

The global payments giant, PayPal, has obtained approval from the Financial Conduct Authority (FCA) to offer cryptocurrency-related services in the United Kingdom, as reported by Reuters.

Authorization Confirmed by FCA

According to the FCA’s website, PayPal has been registered for “certain crypto asset activities” in the UK since October 31, 2023. This authorization is part of PayPal’s plan to establish a dedicated facility in the UK, aligning with the post-Brexit operational landscape.

Regulatory Scrutiny and Compliance Measures

The FCA requires companies entering the cryptocurrency market to implement strong measures against money laundering and terrorist financing. This regulatory scrutiny comes ahead of the UK’s anticipated regulatory framework for cryptocurrencies. In response to changing legislation, PayPal had temporarily suspended crypto purchases for its UK users in October.

Operational Shift for UK Clientele

Effective November 1, PayPal’s UK customers will transition from PayPal Europe to a newly established entity within the UK. This transition is a direct result of the UK’s departure from the European Union and will ensure seamless access to PayPal’s products and services.

Limitations on Crypto Services

Although the registration allows PayPal to engage in specific crypto asset activities, there are limitations. The FCA register states that PayPal’s crypto services will be restricted, including a pause on onboarding new customers and limiting existing customers to holding and selling functionalities. PayPal is prohibited from expanding its crypto asset offerings, such as crypto exchange services, participating in initial coin offerings, staking, peer-to-peer exchange, and decentralized finance operations.

See also  Is XRP Adoption by US Banks Getting Closer?

Significance for the UK Cryptocurrency Sector

PayPal’s acquisition of the FCA crypto license makes it the fourth entity to receive such registration, joining Interactive Brokers, Bitstamp, and Komainu. This development may strengthen the UK’s position in the growing bitcoin and cryptocurrency domain. It reflects the UK and PayPal’s efforts to adapt to the post-Brexit economic and regulatory landscape, while fostering an environment conducive to cryptocurrency operations and compliance.

Image source: Shutterstock

### News source:

By Team