PayPal gets UK crypto license
US online payments giant PayPal (NASDAQ:PYPL) has taken a major step forward in both its international and crypto growth strategy, receiving a crypto license in the UK from regulator Financial Conduct Authority. The new licensing will allow PayPal to serve UK clients engaging in crypto transactions directly from the UK, instead of via its EU based entities.
According to filings in the FCA’s Registered Cryptoasset Firms listings, PayPal UK Limited became registered for certain cryptoasset activities in the UK effective yesterday, October 31, 2023.
PayPal’s UK crypto license is one of only four granted by the FCA during 2023 – the other three being to Bitstamp, Komainu, and Interactive Brokers (NASDAQ:IBKR).
The new UK crypto license for PayPal comes soon after the FCA enacted new, stricter rules governing the marketing of digital assets. Since October 8, 2023, firms wishing to promote cryptoassets in the UK must, by law, be authorised or registered by the FCA, or have their marketing approved by an authorised firm. Under FCA rules, promotions must also be clear, fair and not misleading, labelled with prominent risk warnings and must not inappropriately incentivise people to invest. These changes bring cryptoassets in line with other high-risk investments in the UK.
From January 10, 2020, firms carrying out specific cryptoasset activities in the UK have needed to comply with the amended Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLRs), and register with the FCA.
The new license comes at a time when PayPal shares are trading near a multi-year low, amid inflation concerns, slowing growth, and concern that PayPal’s long-time dominance of the online payment space is waning.
PayPal share price graph, past five years. Source: Google Finance.