PayPal brings its crypto service to the UK

Online payments company PayPal is launching its cryptocurrency service in the U.K.

It has said that customers in Britain will be able to buy, hold and sell digital currencies. The move is the first international expansion of PayPal’s crypto product since it was introduced in the US in October 2020.

PayPal has turned to the New York-regulated digital currency company Paxos to enable buying and selling in the UK. Paxos already does this for the PayPal US crypto operation. UK customers will be able to buy or sell bitcoin, bitcoin cash, ethereum or litecoin and track crypto prices in real-time.

PayPal has said it has been in touch with UK regulators about the introduction of the service, which is similar to one offered by UK fintech firm Revolut. As with Revolut, PayPal users are not able to move their crypto holdings outside of the app. Revolut, however, has begun tests on a feature that would allow users to withdraw bitcoin to their personal wallets.

PayPal believes its service will help make it more straightforward for people to become involved in the crypto market.

With the likes of Mastercard, Tesla and Facebook also proving more receptive to cryptocurrency recently, PayPal’s move into this area is yet another sign that warnings over crypto’s price volatility, lack of consumer protection and money laundering risks are yet to hamper its development.

It should be noted, however, that PayPal will need full registration before it can operate, with the FCA able to give approval to cryptocurrency trading companies to carry out activities under its anti-money laundering rules. 

The online payments giant will have to work with the FCA, which has previously warned consumers that many crypto assets are highly speculative and can quickly lose their value. But the FCA does not have consumer protection powers – meaning it is not responsible for ensuring that crypto asset businesses protect their clients' money.