PayPal has received approval from the Financial Conduct Authority (FCA) to provide cryptocurrency services in the United Kingdom. According to the official FCA data, PayPal has been registered to offer "certain crypto asset activities" in the UK since October 31, 2023.
The FCA's Restrictions on PayPal's Crypto Activities
The FCA granted PayPal the ability to offer cryptocurrency services. However, certain requirements and restrictions have been placed on its financial activities. These limitations include stopping the onboarding of new customers and restricting existing customers to holding and selling cryptocurrency assets only.
PayPal is not permitted to expand its current offerings in the crypto space. This restriction encompasses various crypto-related activities. The restriction includes crypto exchange services, participation in initial coin offerings, staking, peer-to-peer exchange, and decentralized finance activities, such as lending and borrowing.
PayPal joins the ranks of other firms like Interactive Brokers, Bitstamp, and Komainu, making it the fourth company to receive the FCA's crypto registration in 2023. This licensing development follows PayPal's brief suspension of cryptocurrency purchases for its UK customers in early October. The company stated in August that it was working to comply with new regulatory requirements in the country.
The United Kingdom has been increasingly establishing itself as a significant cryptocurrency market. According to an October 2023 report by the blockchain analytics firm Chainalysis, the UK leads Central, Northern, and Western Europe in terms of raw cryptocurrency transaction volume.
Furthermore, a study by the crypto tax platform Recap identified London as the world's most crypto-ready city for business in February 2023. These trends highlight the growing significance of the UK in the global cryptocurrency landscape.
Komainu Gains Access to the UK Crypto-Custody Market
The FCA has granted regulatory approval to Komainu, a Nomura-backed crypto platform, allowing it to operate as a custodian wallet provider in the UK's crypto-custody market under relevant regulations, Finance Magnates reported. Komainu will offer crypto-custody services, including collateral management via its Komainu Connect platform, for secure and compliant storage of digital assets.
It is a step to position Komainu to capitalize on the expanding digital asset ecosystem in the UK and other key jurisdictions, facilitating the convergence of traditional and decentralized finance. Komainu has previously obtained regulatory licenses in Jersey and Italy, and it has been operational in Singapore since 2021.
