PayPal has registered with the UK’s Financial Conduct Authority (FCA) to offer certain crypto asset activities.
The FCA has authorised PayPal as an electronic money institution, a consumer credit firm, and registered it as a crypto asset business. Starting November 1, UK customers will transition from PayPal Europe to a new entity based in Britain. This transition aligns with the UK’s departure from the European Union.
PayPal joins a select group of entities, including Interactive Brokers, Bitstamp, and Komainu, as the fourth firm to receive FCA’s crypto registration in 2023. This accomplishment positions PayPal within the evolving crypto regulatory framework in the UK.
PayPal’s registration comes amid a broader trend of regulatory tightening in the crypto sector in the UK. The government’s plan to introduce stricter measures and the FCA’s scrutiny of crypto providers signal the evolving landscape for crypto businesses in the country.
Acknowledging the regulatory shift, PayPal assures customers that it will continue offering the same products and services in the UK. Additionally, the company is expanding its team in the UK, seeking candidates for roles such as a crypto money laundering reporting officer and the head of financial crime.
The temporary pause in UK crypto services, announced in August, remains unaffected by the recent FCA registration. PayPal anticipates resuming these services in early 2024, aligning with its commitment to meeting regulatory standards.
While awaiting the establishment of formal crypto market rules in Britain, companies aiming to provide crypto assets must demonstrate to the FCA that they have robust safeguards against money laundering and terrorist financing. The FCA has implemented stricter measures on marketing crypto assets, impacting competitors like Binance.
Having introduced crypto buying and selling in 2021, PayPal temporarily halted UK customers’ ability to buy crypto assets from October 1, citing compliance with impending FCA regulations.
While gaining FCA approval, PayPal faces restrictions in its UK crypto services. The company cannot onboard new customers, restricts existing customers to hold and sell functionalities, and is prohibited from expanding its current offering in various crypto activities without FCA permission.
The company expects to resume these services in early 2024.