PayPal launched its cryptocurrency service in the UK
LONDON – PayPal launches its cryptocurrency service in the UK
The US online payment giant said Monday it would allow UK customers to buy, own and sell digital currency starting this week.
It is the first international expansion of PayPal’s crypto product, which first launched in the US last October.
“It’s doing really well in the US,” Jose Fernandez da Ponte, PayPal’s general manager for blockchain, crypto and digital currencies, told CNBC. “We expect the UK will do well”
With PayPal’s crypto function, customers can buy or sell Bitcoin, Bitcoin cash, Ethereum or Litecoin for as little as £ 1. Users can also track real-time crypto prices and find educational content in the market.
Like the US version of the product, PayPal relies on Paxos, a New York regulated digital currency company, to facilitate the buying and selling of crypto in the UK.
A spokesman for the Financial Conduct Authority, the UK’s financial regulator, was not immediately available to comment on the announcement.
PayPal’s crypto service is similar to that of the British fintech company Revolut. As with Revolut, PayPal users cannot move their crypto holdings outside of the app. Although Revolut recently started testing a feature that would allow users to withdraw bitcoins into their own personal wallets.
According to PayPal, its foray into cryptocurrencies is about making it easier for people to participate in the market. “The tokens and coins have been around for a while, but you had to be a relatively experienced user to access them,” said da Ponte. “Having that on a platform like ours is a really good point of entry.”
The payment processor is one of many large financial firms taking the plunge into the largely unregulated world of cryptocurrencies. Despite ongoing concerns about price volatility, consumer protection, and potential money laundering in the industry, big companies like Mastercard, Tesla, and Facebook have been warming up to crypto lately.
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Bitcoin, the world’s largest digital currency, hit a record high of nearly $ 65,000 in April before falling below $ 30,000 in July when Chinese regulators cracked the market. Since then, it has rallied to a price of $ 48,400.
While PayPal started crypto trading, the company is betting that digital currencies will play a bigger role in e-commerce in the long term. Earlier this year, PayPal began enabling US consumers to use crypto to pay at millions of its online merchants around the world. The company also expanded crypto buying and selling to Venmo, its popular mobile wallet.
“We definitely have ambitions to expand our product range in the US, UK and other markets,” said Da Ponte.
“We start very consciously with the initial functionality and then see where the market leads us. Different markets have different appetites for products.”
The launch of PayPal’s crypto service in the UK is also coming as regulators become increasingly suspicious of the rise of digital currencies. In June, the FCA banned the UK subsidiary of Binance, the world’s largest crypto exchange, on the grounds that it failed to comply with money laundering regulations.
“It makes sense that regulators are paying more attention to this area given the increased consumer interest and volume,” said da Ponte, adding that PayPal has established “strong regulatory relationships”.
In the meantime, central banks are considering the potential issue of their own digital currencies as cash use is falling rapidly in a number of developed countries. In April, the UK Treasury Department and the Bank of England announced that they were exploring the potential introduction of a digital version of the British pound, dubbed “Britcoin” by the UK press.
Da Ponte said central banks or CBDCs digital currencies are a “fantastic prospect” but it would take some time for policy makers to resolve key issues.