Key Takeaways
- PayPal UK Ltd has successfully registered as a crypto service provider with the FCA.
- It can now authorize its own communications related to crypto under the FCA’s marketing regulations
- PayPal’s registration coincides with the UK government’s announcement of tightening crypto regulations.
- The FCA has seen a low approval rate, with only 14% of the 326 crypto registration applications validated.
After the August fiasco, when it decided to stop purchasing Ethereum and Bitcoin in the UK, Paypal seems to be ready for a new shopping spree.
The financial services behemoth has successfully registered as a crypto service provider with the UK Financial Conduct Authority (FCA), according to the regulator’s website .
PayPal UK Gains FCA Registration for Crypto Activities
After being added to the registration on Tuesday, Paypal UK Limited is allowed to do “certain cryptoasset activities.” Businesses that provide cryptocurrency services in the United Kingdom are required to adhere to the FCA’s anti-money laundering regulations and be granted registration.
By landing on the register, which became live in 2020, PayPal will now be able to authorise its own communications pertaining to cryptocurrency under the recently enforced marketing regulations. PayPal declared in August that, in order to comply with the regime, it was temporarily stopping cryptocurrency purchases in the nation.
After Bitstamp, Komainu, and Interactive Brokers, PayPal was the fourth company this year to gain the FCA’s crypto registration.
“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 company stated .
It added that after the UK left the European Union, there was a change. Up until now, PayPal Europe has served clients in the United Kingdom where it still provides its users with the same goods and services.
Approval Amidst Tighter Regulations in UK
PayPal registered as a cryptocurrency at the same time as the UK government announced plans to tighten regulations on cryptocurrency providers under the Financial Services and Markets Act.
According to a Treasury notice on October 30, cryptocurrency exchanges may need to comply with new admittance and disclosure rules should they choose to list digital assets.
In the period from January 2020 to October 6, 2023, 326 applications for crypto registration were received . With only 43 registrations approved, the approval rate is 14%.
PayPal stated in August that it was stopping cryptocurrency purchases in the UK until 2024 due to FCA laws that were more stringent.
The representative affirmed that the new registration doesn’t effect the pause. There’s no precise moment when the halt will end yet.
According to its website, PayPal is growing its staff in the UK and is hiring for ten positions, including the head of financial crime and a reporting officer for cryptocurrency money laundering.
Adopting EU-Inspired Crypto Regulations
In June, the European Union began implementing the world’s first comprehensive set of regulations tailored to cryptoasset markets. This has attracted cryptocurrency companies seeking regulatory stability to establish operations within the union.
The British Finance Ministry said that it would proceed with the proposal from a public consultation in February, requiring companies that engage in cryptoasset activities to obtain a Financial Conduct Authority authorization. However, it did not specify a start date.
The regulations, which took lessons from the collapse of FTX, concentrate on cryptoassets, like Bitcoin, and the DLT or blockchain that power the industry and have potential applications in the settlement of securities.
