PayPal, the global digital payments company, has announced in an email to select users in the United Kingdom that it will temporarily pause its cryptocurrency buying services in the country. This decision comes as a result of new rules introduced by the U.K. Financial Conduct Authority (FCA), which requires PayPal to implement additional steps before customers can purchase crypto.
Effective from October 1, 2023, the crypto buying service will be paused and will remain unavailable until an undisclosed date in early 2024. During this period, PayPal users in the U.K. will still be able to hold and sell their existing cryptocurrency holdings. However, it is unclear whether users will have the ability to transfer their crypto to other wallets or exchanges, as this feature seems to be limited to users in the U.S. at present.
PayPal assures its users that their cryptocurrency holdings will remain safe during the service disruption. Additionally, the company states that there will be no charges for holding crypto during this period. PayPal acknowledges the inconvenience caused to its customers and apologizes for the disruption to their buying services.
The decision to pause crypto buying services in the U.K. is in response to the introduction of new rules by the FCA. However, PayPal has not specifically mentioned which rules they are referring to. One of the new regulations set to be enforced in September 2023 is the Crypto Travel Rule, which requires crypto companies to collect information about parties involved in transactions. It is unclear if this rule aligns with PayPal’s October service change.
The FCA has also recently introduced promotional rules to regulate how crypto can be promoted or advertised to potential investors. These rules are set to come into effect in October but do not seem to match PayPal’s description of user-focused requirements. It is uncertain whether these promotional rules played a role in the decision to pause crypto buying services.
The temporary suspension of crypto buying services in the U.K. is surprising given that PayPal is expanding its cryptocurrency offerings in the United States. In fact, PayPal recently announced the introduction of its own USD stablecoin, and there have been suggestions that it could be extensively used in DeFi (Decentralized Finance). Reports also indicate that PayPal is merging its features into a centralized “Cryptocurrency Hub.” These developments in the U.S. market stand in stark contrast to the reduced services being offered in the U.K.
PayPal’s decision to temporarily pause crypto buying services in the U.K. is a response to new regulatory requirements set by the FCA. While the specific rules are not mentioned, the company cites the need to implement additional steps before customers can purchase crypto. This service disruption will begin on October 1, 2023, and is expected to last until early 2024. Despite the inconvenience, PayPal assures its U.K. users that their crypto holdings are safe and that there will be no charges for holding during this period. It remains to be seen how these new rules will impact the future of cryptocurrency transactions in the U.K. and how PayPal’s approach may differ from its expansion in the United States.
Leave a Reply