PayPal receives digital asset green light in the UK

PayPal has become the latest company to receive the green light to offer digital asset services in the United Kingdom, albeit with some restrictions.

The San Jose, California-based payments company joins 42 other firms that the Financial Conduct Authority (FCA) has authorized to serve U.K. residents. FCA added PayPal into its register on October 31.

PayPal joins other major players in the sector with FCA approval, including U.K. fintech unicorn Revolut and American firms Uphold Europe, Galaxy Digital and Fidelity Digital Assets. It’s the fourth company to obtain approval this year after Interactive Brokers, Bitstamp and Komainu, a BTC custodian. The first company to obtain the license was Archax Ltd. on August 18, 2020.

“The FCA has approved PayPal UK Limited as an authorised electronic money institution and consumer credit firm, and registration as a cryptoasset business, enabling the transfer of PayPal’s UK customer accounts to this new UK entity from PayPal Europe on 1 November 2023,” a spokesperson for the firm told one outlet.

“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 has continued to invest in its digital asset services as it seeks to diversify from its traditional payments business. In August, it launched PayPal USD (PUSD), a U.S. dollar-denominated stablecoin.

It has also been pushing its ‘crypto’ services, including in the U.K., allowing users to purchase, sell and hold digital assets. However, the FCA’s crackdown has forced the company to hold back on its services. In mid-August, PayPal announced that it was temporarily suspending its digital asset services “as we work to satisfy new regulatory requirements.”

Registering by the FCA will allow PayPal to offer more digital asset services and advertise its services to U.K. investors. However, according to its spokesperson, the license won’t have any effect on the ongoing service suspension.

In the U.S., the company’s PUSD stablecoin is attracting scrutiny from regulators. In its latest earnings report, PayPal revealed that it had received a subpoena on PUSD from the SEC’s Enforcement Division.