PayPal Pauses UK Crypto Services
PayPal, a major player in the fintech and cryptocurrency space, has announced its decision to temporarily suspend cryptocurrency buying services in the United Kingdom starting from October 1, 2023. This pause is anticipated to last until early 2024, as the company aims to align with new regulatory requirements introduced by the UK Financial Conduct Authority (FCA).
Calling up the Fed to get permission. https://t.co/fqaC1Dv4rE https://t.co/IiMNIeXxYv
— Simon Dixon (@SimonDixonTwitt) August 15, 2023
PayPal’s UK Crypto Pause
The announcement was shared through an email communication to select users on August 14. While crypto buying will be put on hold during this period, existing users will still have the ability to hold and sell their cryptocurrencies. However, PayPal has not provided explicit clarity on whether cryptocurrency transfers to other wallets or exchanges will be supported, as this feature seems to be limited to users in the United States at present.
The decision to temporarily halt crypto buying services comes as PayPal strives to comply with the evolving regulatory landscape in the UK. The FCA has instituted new rules that demand PayPal to implement additional safeguards before customers can make crypto purchases. Despite the lack of detailed information about these regulations, the move signifies PayPal’s commitment to staying within the bounds of the law.
UK Crypto Regulations
Coincidentally, the UK is preparing to enforce the Crypto Travel Rule in September 2023, a regulation that compels crypto businesses to gather transaction information about parties involved. Additionally, new promotional regulations regarding crypto advertising will take effect in October. Although these rules may not perfectly align with PayPal’s stated reasons for the service suspension, they reflect the broader effort by regulatory bodies to bring greater oversight and transparency to the cryptocurrency industry.
Read More: Singapore’s MAS Unveils Stablecoin Framework
This temporary suspension of services in the UK contrasts with PayPal’s ongoing expansion of its cryptocurrency offerings in the United States. Recently, the company introduced a USD-pegged stablecoin named PayPal USD (PYUSD), aiming to bridge the gap between traditional fiat currencies and the digital asset space. The stablecoin is backed by short-term US Treasuries and similar cash equivalents, offering increased compatibility with exchanges, wallets, and Web 3 applications.
