PayPal announced that it will temporarily suspend crypto purchases on its platform for its U.K. based users beginning in October.
The move comes in response to evolving regulatory guidelines provided by the Financial Conduct Authority (FCA) – Britain’s chief market regulator.
PayPal Pauses Crypto Buys
Per an email received by certain U.K. users on Wednesday, the suspension will take effect on October 1, and is expected to last until early 2024.
“Your crypto remains safe,” clarified the company. “You can keep it on our platform at no charge. You can also sell your crypto at any time.”
PayPal will ‘pause’ crypto purchases in UK ???????? pic.twitter.com/NPkj7F61cC
— Crypto Crib (@Crypto_Crib_) August 16, 2023
PayPal enabled crypto services for U.K. customers in September 2021, allowing them to buy, sell, and hold crypto. This followed its initial launch in the United States as early as October 2020.
To this day, supported assets are limited to Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), and Litecoin (LTC). In Q1, the company held over $1 billion worth of these assets on its balance sheet o behalf of customers.
Though its crypto business model may seem simple, the FCA now requires crypto firms to “implement additional steps before customers can purchase crypto.” PayPal said it works closely with regulators to ensure that it stays compliant wherever it operates.
“We apologize for the inconvenience,” said the company. “We will let you know when we have implemented the required changes to the crypto experience.”
Compared to the United States, crypto companies have praised U.K. regulators and policymakers for embracing crypto, and helping provide a clear pathway to industry compliance.
In late June, the nation passed a bill establishing crypto and stablecoin businesses as within the regulatory perimeter, while giving the FCA authority to create a clear regulatory framework for the sector.
Last month, the FCA published guidelines claiming that crypto memes could potentially amount to criminal offenses if they did not comply with existing financial promotion laws.
PayPal’s Stablecoin Startup
PayPal’s latest foray into the crypto industry is an attempt to launch its own stablecoin, which will be pegged to the U.S. dollar.
Announced last week, PYUSD will be based on Ethereum and will be backed by cash, U.S. T-bills, and other cash equivalents. While currently only usable in crypto and Web 3-related activities, PayPal plans to popularize it for lost-cost transfers between users and merchants worldwide.
Shortly after the announcement, PayPal CEO Dan Schulman said that he will step down from his position in late September.
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