PayPal’s Temporary Suspension of Crypto Services in the UK
PayPal recently announced the release of PYUSD stablecoin, marking a significant move that puts the payment processor in direct competition with other stablecoin issuers such as Circle and Tether. Despite being one of the few traditional financial giants to enter the crypto space, PayPal has decided to take a step back from the United Kingdom.
PayPal Halts Crypto Services in the UK
According to CoinDesk, PayPal issued a statement stating that it will temporarily stop offering cryptocurrencies to its customers in the UK due to stricter regulations imposed by the Financial Conduct Authority (FCA). Companies are now required to implement “additional steps” before customers can purchase crypto, likely referring to mandatory identity verification and anti-money laundering checks.
Customers who have already purchased cryptocurrencies through PayPal will be allowed to retain their coins and retain the ability to sell them. However, starting from 1st October, the option to make new purchases will be disabled.
The tightening of regulations on crypto companies, including PayPal, in the United Kingdom is not unexpected. While the country aims to position itself as a “crypto hub” and establish favorable rules, stringent identity verification and anti-money laundering measures are crucial. This measure is expected to be temporary, and by early 2024, PayPal aims to reintroduce the option once it fully complies with all regulations.
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Earlier this year, British banks even blocked transfers to crypto exchanges. However, the crypto industry achieved a victory earlier this summer when the UK officially recognized crypto as an investment rather than gambling.
PayPal’s Strong Embrace of Crypto
Meanwhile, PayPal appears to have ambitious plans for cryptocurrencies and blockchain technology. With the announcement of the PayPal USD (PYUSD) stablecoin, the company also updated its user terms, indicating that it intends to function as a fully-fledged crypto exchange. However, analysts anticipate that PayPal will face significant competition, despite being one of the largest companies in the industry.