PayPal (NASDAQ:PYPL) UK Limited, the UK branch of the online payments giant, received regulatory approval from the Financial Conduct Authority (FCA) on October 31. The license now allows PayPal to start offering services to UK nationals.
PayPal becomes the fourth company to receive FCA approval in 2023
The approval was noticed after the recent update of the FCA’s crypto register, which only saw four new additions in 2023. Apart from PayPal, the only other companies to receive similar approval this year were Bitstamp, Komainu, and Interactive Brokers.
The company’s spokesperson commented on the new development, stating that PayPal UK Limited is now an authorized electronic money institution and consumer credit firm.
In addition, the company was able to register as a crypto asset business, enabling the transfer of PayPal’s UK customer accounts to this new UK entity from PayPal Europe on November 1, 2023.
The spokesperson added,
The change follows the UK’s exit from the European Union. Until now, PayPal Europe has provided services to UK customers. PayPal continues to offer our customers the same products and services in the UK.
PayPal will maintain the pause on crypto purchases until 2024
In the past several years, between January 2020 and October 2023, the FCA received 326 crypto registration applications. However, the regulator only approved 43 of them, placing its approval rate at around 14%.
PayPal was more than willing to comply with the stricter regulations, announcing in August this year that it would pause crypto purchases in the UK until 2024.
The company’s spokesperson confirmed that this decision is still in effect and that the registration will not change. As for the exact date when the company will lift the pause, it has yet to be confirmed.
But, with the regulatory approval, PayPal can start expanding its UK team. As such, it seeks candidates for ten new roles, including the head of financial crime and a crypto money laundering reporting officer.
FCA is working on enforcing stronger regulations
PayPal’s permission to offer crypto services to UK citizens comes amid the government’s efforts to introduce stricter regulations on the sector.
The goal is to regulate the industry under the existing Financial Services and Markets Act framework, which obligated crypto exchanges to meet new admission and disclosure requirements when they decide to list digital assets.
Initially, the FCA encountered difficulties getting foreign companies operating in the UK to comply with the rule changes, which led it to resort to threats of hefty fines and penalties for those who failed to comply.
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