PayPal has officially obtained registration for its cryptocurrency activities in the United Kingdom, according to the Financial Conduct Authority website. This marks a significant step for the global payment giant as it establishes a post-Brexit footprint in Britain.
The approval was granted to PayPal U.K. Ltd. on Oct. 31, 2054, making it the fourth company to receive FCA registration for cryptocurrency-related operations in the current year, following in the footsteps of Komainu, Bitstamp and Interactive Brokers. Despite this milestone, PayPal UK.’s journey into the world of crypto won’t be entirely without obstacles, as the regulator has placed certain restrictions on its operations. PayPal will not be allowed to expand its range of crypto services to include activities such as staking, cryptocurrency exchanges, participation in initial coin offerings (ICOs) or involvement in decentralized finance (DeFi) ventures, such as lending, without obtaining explicit approval from the regulator.
PayPal first entered the cryptocurrency arena in 2021, enabling users to buy and sell digital assets. More recently, they introduced a new stablecoin called PayPal USD in the United States, becoming a pioneering player in the financial technology sector by embracing digital currencies for seamless payments and transfers.
Back in August, PayPal announced that it would be temporarily suspending its U.K. customers’ ability to buy cryptocurrency assets as of Oct. 1, 2023, with intentions to bring back the services early next year. A recent statement from a company representative confirmed that the FCA has approved PayPal to operate as an authorized consumer credit platform, e-money institution, and cryptocurrency asset firm. However, the temporary pause in U.K. crypto services will continue until next year.
The company’s U.K. customers will be transferred to a new U.K.-based platform transitioning from PayPal Europe on Nov. 1, 2023. The company has assured its customers that it will continue to provide the same range of services and products in the United Kingdom.
While the cryptocurrency market in the U.K. is still awaiting its first set of regulations, companies seeking to offer cryptocurrency assets must demonstrate to the FCA that they have robust safeguards in place to prevent money laundering and the financing of terrorism through their services. The regulator has also introduced stricter regulations for marketing cryptocurrency assets, which have caused disruptions for competitors such as Binance.
Earlier this year, the FCA unveiled what it termed “stringent rules” for cryptocurrency marketing, requiring companies promoting cryptocurrency assets to consumers in the U.K. to implement a “cooling-off” period for new investors and prohibiting the offering of “refer a friend” bonuses.
With major entities such as PayPal consolidating their presence in different crypto markets, including the U.K., enterprises such as Stronghold Digital Inc. (NASDAQ: SDIG) can rest in the knowledge that blockchain technology and cryptocurrency are slowly but surely penetrating different industries.
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