PayPal launched its cryptocurrency service in the UK
LONDON – PayPal launches cryptocurrency service in UK
The US online payments giant said on Monday it would let UK customers buy, hold and sell digital currencies, starting this week.
This is the first international expansion of PayPal’s crypto product, which first launched in the United States in October of last year.
âIt works very well in the United States,â Jose Fernandez da Ponte, general manager of PayPal for blockchain, crypto and digital currencies, told CNBC. “We expect it to work well in the UK”
PayPal’s crypto feature allows customers to buy or sell bitcoin, bitcoin cash, ethereum, or litecoin with as little as Â£ 1. Users can also track crypto prices in real time and find educational content in the market.
Like the US version of the product, PayPal relies on Paxos, a regulated digital currency company in New York City, to enable the buying and selling of crypto in the UK. PayPal said it has engaged with relevant UK regulators to launch the service.
A spokesperson for the Financial Conduct Authority, the UK’s financial services watchdog, was not immediately available for comment on the announcement.
PayPal’s crypto service is similar to that of UK fintech firm Revolut. As is the case with Revolut, PayPal users cannot move their crypto holdings outside of the app. Although Revolut recently started testing a feature that allows users to withdraw bitcoin into their own personal wallets.
PayPal says its foray into crypto is aimed at making it easier for people to participate in the market. âTokens and coins have been around for a while, but you had to be a relatively sophisticated user to be able to access them,â da Ponte said. “Having that on a platform like ours is a really good entry point.”
The Payments Processor is one of many large financial companies to jump into the largely unregulated world of cryptocurrency. Despite lingering concerns about price volatility, consumer protection and potential money laundering in the industry, large companies such as Mastercard, Tesla and Facebook have recently turned to crypto.
Bitcoin, the world’s largest digital currency, hit a record high of nearly $ 65,000 in April before dropping below $ 30,000 in July as Chinese regulators extended the crackdown on the market. It has since recovered at a price of $ 48,400.
While PayPal started out with crypto trading, the company is betting that digital currencies will play a bigger role in e-commerce in the long run. Earlier this year, PayPal began allowing U.S. consumers to use crypto to pay at millions of its online merchants around the world. The company has also extended the buying and selling of crypto to Venmo, its popular mobile wallet.
âWe definitely have the ambition to continue expanding the product line in the US, UK and other markets,â said da Ponte.
âWe’re very determined to start with the initial functionality and then we’ll see where the market takes us. Different markets have different appetites for products. “
The launch of PayPal’s crypto service in the UK also comes as regulators are increasingly wary of the rise of digital currencies. In June, the FCA banned the UK subsidiary of Binance, the world’s largest crypto exchange, citing non-compliance with money laundering requirements.
“It makes sense that with increased consumer interest and increased volume, regulators are paying more attention to this space,” da Ponte said, adding that PayPal had established “a strong regulatory relationship.”
Meanwhile, central banks are exploring the potential issuance of their own digital currencies, as the use of liquidity in a number of developed countries is rapidly declining. In April, the British Treasury and the Bank of England announced that they would assess the potential launch of a digital version of the British pound, dubbed “Britcoin” by the British press.
Da Ponte said central bank digital currencies, or CBDCs, were a âfantastic prospect,â but that it would take some time for policymakers to iron out the main issues involved.