As UK regulator readies crypto advertising rules, PayPal says it will “temporarily pause” British users from buying cryptocurrencies
PayPal is to halt UK customers from buying cryptocurrencies on its platform, as it works to comply with new British rules on crypto promotions.
According to Reuters, the fintech giant has announced that it will temporarily pause the ability for UK customers to buy cryptocurrencies on its platform starting 1 October 2023, and expects to restart cryptocurrency purchases early in 2024.
The decision comes as the UK’s financial regulator, the Financial Conduct Authority (FCA), is expected to introduce stricter rules for crypto, including how crypto is promoted or advertised, under the new rules, on 1 September.
PayPal had launched cryptocurrency trading (buying and selling) in the UK in 2021/
Then last week it said it would launch its own stablecoin, making it the first major financial technology company to launch one.
The PayPal USD (PYUSD) token formally launched a week ago and PayPal said it would become available “in the coming weeks” to US customers with PayPal Balance accounts.
The firm it would also be available “soon” on payments service Venmo, a PayPal subsidiary.
Stablecoins are pegged to the value of a major government issued-currency, but governments are still evaluating how to regulate them.
In the meantime however, the UK’s FCA readies tougher rules to limit how crypto is advertised to British consumers, including requiring crypto firms to carry warnings about the risk and scrapping “refer a friend” bonuses.
Reuters reported that as a result, PayPal in an email to customers on Tuesday said it will “temporarily pause” the ability for customers to buy crypto on its platform from 1 October as it works to satisfy the new regulations, which come into effect on 8 October.
PayPal reportedly said it expects to re-start in “early 2024”.
“PayPal consistently works closely with regulators around the world to adhere to applicable rules and regulations in the markets in which we operate,” it told reportedly customers in the email, a copy of which it shared with Reuters.
It said customers could hold and sell their crypto “at any time.”
It has been a eventful period for PayPal.
In January it confirmed that hackers had accessed nearly 35,000 accounts in early December using valid passwords obtained from breaches of other websites.
Then in February 2023 PayPal announced 2,000 job losses (or 7 percent of the workforce) as the US fintech firm admitted it was working to address the “challenging macroeconomic environment.”
Last week it launched the PayPal USD (PYUSD) stablecoin token, and then also named Alex Chriss, the senior executive who runs the small business group at Intuit, as its new CEO.