The US-based financial payments giant PayPal has secured a crypto licence from the UK’s Financial Conduct Authority (FCA), granting it the authority to engage in “certain crypto asset activities” within the UK, effective Oct 31, 2023.
PayPal has been registered under the Money Laundering Regulations (MLRs) of the FCA, designed to prevent money laundering and terrorist financing. It has met the FCA’s high standards for compliance and security.
The FCA’s financial services register outlines the specific consumer protections that apply to PayPal’s activities. While some of these protections are provided directly by the FCA, others are offered by the Financial Ombudsman Service and the Financial Services Compensation Scheme.
The register states that PayPal’s crypto licence in the UK is subject to specific requirements and restrictions. According to the register, “This includes but is not limited to ceasing onboarding new customers and restricting existing customers to hold and sell functionality.”
The register also notes that “The firm cannot expand its current offering in crypto assets, including, but not limited” to crypto exchange services, participation in initial coin offerings, staking, peer-to-peer exchange, and decentralised finance activities.
PayPal is the fourth firm to receive the FCA’s crypto registration in 2023. The brokerage firm Interactive Brokers was the first to receive it in 2023, followed by crypto exchange Bitstamp and crypto custody firm Komainu.
PayPal’s licence acquisition comes after it temporarily halted Bitcoin purchases in the UK on Oct 1, 2023, with plans to re-enable the service in early 2024. The company cited strict regulations by the UK’s financial regulator, FCA, as the reason for the halt.
The FCA has always been a frontrunner in crypto regulation, taking various steps to oversee the crypto industry. These steps include mandating crypto asset firms in the UK to register with the FCA and collaborating with international regulators to develop global standards for crypto regulation.
However, even with such strict regulations, it has emerged as a significant player in the crypto economy, securing 14th position on Chainalysis’ Global Crypto Adoption Index for Grassroots Adoption. With FCA’s progressive approach to crypto regulation, the country will likely attract more crypto businesses.
Source : Forbes India / November 04, 2023