- PayPal has announced a temporary pause on cryptocurrency purchases for its UK customers
- While crypto purchases are suspended until early 2024, existing holders can retain and sell their assets without charges
- This move follows further demands on crypto providers from the UK’s financial watchdog
Cryptocurrency-focused payments platform PayPal has announced a pause on cryptocurrency purchases for its UK customers in order to adhere to new local financial regulations. Starting from October 1, 2023, PayPal will temporarily suspend the option for its UK users to buy cryptocurrencies, although customers who currently possess cryptocurrencies on the platform will still be able to retain them without any charges and can sell their holdings whenever they choose. The measure is a direct response to recent guidelines laid out by the UK’s financial watchdog the Financial Conduct Authority (FCA) which requires cryptocurrency firms to take additional steps before allowing clients to make cryptocurrency purchases through their services.
PayPal Wants to Toe the Line
PayPal launched its crypto service to much fanfare in late 2020, arriving first in the US and then in the UK this time last year. PayPal emailed UK customers this week to inform them of the temporary crypto suspension and provided a timeline for the change, stating that it anticipates re-enabling crypto purchases in early 2024, once it has successfully navigated the regulatory adjustments set by the FCA.
The move is another sign that PayPal is committed to crypto services and comes on the back of the introduction of the PayPal USD (PYUSD) stablecoin last week and the platform’s dedicated cryptocurrency hub feature on its interface.
Tougher Regulations Incoming
The pause coincides with the UK government’s preparations to enforce the “Travel Rule fully,” a significant set of Know-Your-Customer and Anti-Money Laundering regulations developed by the Financial Action Task Force. Effective from September 1, 2023, all crypto firms registered with the FCA are obligated to adhere to the Travel Rule, following government instructions outlined after relevant legislation was amended in July 2022.
The FCA has also recently mandated that all crypto asset firms must ensure their marketing strategies comply with the financial promotions regime in the UK by October 2023. This underscores the increasing scrutiny and regulatory adjustments the cryptocurrency sector is facing within the UK market, which is being done with the aim of turning the UK into a fully regulated crypto hub.
