According to a recent update on the FCA's crypto register, PayPal UK Limited successfully obtained registration on 31 October.
This registration permits PayPal UK Limited to conduct specific activities related to cryptoassets, signalling its compliance with the FCA's robust anti-money laundering regulations.
PayPal's Spokesperson said:
"The FCA has approved PayPal UK Limited as an authorised electronic money institution and consumer credit firm, and registration as a cryptoasset business, enabling the transfer of PayPal’s UK customer accounts to this new UK entity from PayPal Europe on 1 November 2023,"
The FCA registration enables PayPal UK Limited the ability to engage in specific cryptoasset activities, along with the authority to autonomously approve crypto-related communications under the new marketing regulations.
Nevertheless, the company's entrance into the U.K.'s crypto market is accompanied by certain restrictions, such as the suspension of new client onboarding and constraints on activities limited to holding and selling for existing customers.
However, PayPal's entry into the U.K.'s cryptocurrency sphere is not without limitations.
The FCA register outlines specific constraints on the range of financial services the company can provide, including the suspension of new client onboarding and the restriction of current clients' activities to merely holding and selling.
PayPal's current cryptocurrency services cannot be expanded.
The register explicitly prohibits the company from engaging in activities such as crypto exchange services, participation in initial coin offerings, staking, peer-to-peer exchange, and specific decentralised finance tasks like lending and borrowing.
Similarly, PayPal joins the ranks of other prominent firms, including Interactive Brokers, Bitstamp, and Komainu, that secured FCA's cryptocurrency registration earlier in 2023.
This recognition for PayPal holds significance, particularly following the temporary suspension of its U.K. customers' ability to purchase cryptocurrencies like Bitcoin in early October.
The spokesperson further mentioned:
"The change follows the UK’s exit from the European Union. Until now, PayPal Europe has provided services to UK customers. PayPal continues to offer our customers the same products and services in the UK,"
The United Kingdom has made strides in the cryptocurrency sector, as evidenced by reports from blockchain analytics firm Chainalysis in October 2023, highlighting the country's dominance in crypto transaction volume across Central, Northern, and Western Europe.
A study by the crypto tax platform Recap in February 2023 named London as the leading city globally, poised for cryptocurrency business ventures.
Given these developments, PayPal's registration with the FCA represents a moment in the U.K.'s cryptocurrency narrative, underscoring the growing fusion of traditional financial systems with the emerging world of digital currencies.
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