Payments company PayPal Holdings Inc (NASDAQ: PYPL) has received approval from the UK’s Financial Conduct Authority (FCA) to offer cryptocurrency services. Official FCA data shows that as of October 31, 2023, PayPal is registered for “certain cryptoasset activities” in the UK and can advertise to local clients.
The global payments giant is restricted in terms of the financial services it can provide. According to the FCA, “this includes, but is not limited to, ceasing onboarding new customers and restricting existing customers to hold and sell functionality.”
The firm is not permitted to expand its current service offering in crypto assets without the FCA’s approval. This includes, among others, crypto exchange services, participation in initial coin offerings (ICOs), staking, peer-to-peer exchange, and DeFi activities like lending and borrowing. The firm will also not be permitted to operate “a machine which [uses an] automated process to exchange cryptoassets for money or money for cryptoassets.”
In addition to FCA registration, firms offering crypto services in the UK must adhere to the regulator’s anti-money laundering (AML) policies.
A spokesperson told CoinDesk:
“The Financial Conduct Authority has approved PayPal UK Ltd as an authorised electronic money institution and consumer credit firm, and registration as a crypto asset business, enabling the transfer of PayPal’s UK customer accounts to this new UK entity from PayPal Europe on 1 November 2023.”
With this approval, PayPal joins firms like Interactive Brokers, Bitstamp, and Komainu that have been granted crypto registration this year. It comes after the payments company announced that it would suspend buying of crypto assets like Bitcoin for its UK clients beginning October 1, 2023, and lasting until 2024. This was in order to comply with new FCA rules for companies offering crypto services.
The United Kingdom has seen a steady increase in cryptocurrency use over the past years. An October 2023 report by blockchain analytics firm Chainalysis shows that it is the leading crypto country in terms of raw transaction volume in Central, Northern, and Western Europe. Further, earlier this year, a study by crypto tax platform Recap named London as the most crypto-ready city for businesses and startups.
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