PayPal Receives License to Operate in the UK
- PayPal temporarily halted crypto purchases for UK users in October due to new policies.
- The FCA requires crypto companies to register their services as part of its new policy.
- PayPal launched its dollar-pegged stablecoin in August.
PayPal, a payment company, successfully registered as a cryptocurrency service provider with the UK’s Financial Conduct Authority (FCA), according to the FCA’s official website. Following its registration, “Paypal UK Limited” is now able to provide UK users with crypto-related services. PayPal is the fourth company to receive the FCA’s crypto license in 2023. Other firms include Bitstamp, Komainu, and Interactive Brokers.
The FCA’s registers state that PayPal has restrictions and limitations on the financial services operations it can carry out. The register adds that “this includes, but is not limited to, ceasing onboarding new customers and restricting existing customers to holding and selling functionality.”
The register also adds that PayPal “cannot expand its current offering in crypto assets,” including peer-to-peer exchange, staking, crypto exchange services, initial coin offerings, and decentralized financial (DeFi) transactions such as lending and borrowing.
PayPal’s cryptocurrency aspirations have experienced tremendous growth this year. The most noteworthy milestone is the company’s launch of a dollar-pegged stablecoin known as PayPal USD.
PayPal’s license comes weeks after the payment company stopped allowing its UK customers to purchase crypto due to the FCA’s policies. The FCA requires digital service providers to register with the regulator before providing their services in the UK.
The UK is steadily becoming one of the largest digital currency economies. A new report by Chainalysis ranks the UK as the largest crypto nation in terms of transaction volume in Central, Northern, and Western Europe.
The UK authorities have introduced new rules to guide the growth of crypto activities in the country. Part of the rules seeks to block unregistered companies from marketing their services to UK crypto users. In addition, the FCA requires crypto companies to seek authorization for any material marketing crypto services.
The FCA warned in September that companies that violate the new policies risk facing severe penalties. It said in a statement at the time:
Anyone who continues promoting cryptoassets to UK customers past the October deadline without complying with the rules may be committing a criminal offense punishable by an unlimited fine and/or up to 2 years imprisonment.
In other news, Visa, a payment company, has successfully completed the Hong Kong Monetary Authority’s Central Bank Digital Currency (CBDC) Pilot Programme with HSBC and Hang Seng Bank. The company shared the news on Wednesday, November 1. The e-HKD program focused on tokenized deposits using CBDCs.
In May, Visa was selected for the Hong Kong Monetary Authority’s “Digital Hong Kong Dollar” pilot program in collaboration with the two top banks in Hong Kong. Visa confirmed that it will keep researching new practical use cases for tokenized deposits, concentrating on areas like cross-border payments, expanded retail, programmable finance, and asset market tokenization.