Financial Conduct Authority approves PayPal's crypto services in the UK, but with limitations on activities and customer onboarding.
PayPal has recently obtained approval from the UK's Financial Conduct Authority (FCA) to offer crypto services in the country. The license allows the company to engage in certain crypto asset activities, marking a significant step for PayPal in the UK's crypto market.
However, the FCA's approval comes with a set of stringent restrictions. For instance, PayPal cannot offer services such as crypto exchange, initial coin offerings, staking, peer-to-peer exchange, and decentralized finance activities. The company is also prohibited from operating an automated process for exchanging crypto assets for money or vice versa.
Furthermore, the FCA register notes that PayPal cannot onboard new customers for its crypto services. Existing customers will only be able to hold or sell tokens, but they will not be able to buy any tokens. This means that PayPal's ability to make crypto purchases in the UK will remain paused until 2024.
The registration and restrictions come in the wake of new regulations imposed by the UK Treasury. In August, PayPal temporarily paused crypto purchases in the country to comply with these new regulations. The company's registration as a crypto service provider also allows it to approve its own crypto-related communications under the recently imposed marketing regime.
While the FCA's approval is a significant milestone for PayPal, the imposed restrictions limit the company's operations in the UK's crypto market. However, this development also signifies the UK's efforts to regulate crypto asset activities, ensuring consumer protection and market integrity. It remains to be seen how these restrictions will impact PayPal's crypto services and the broader UK crypto market in the long run.
