PayPal has registered with the UK FCA as a crypto service provider, prohibiting staking and lending services.

Coindesk reported that the payment giant PayPal has successfully registered with the UK Financial Conduct Authority (FCA) as a crypto service provider, allowing it to continue operations in the country. However, registered entities will face some business restrictions, including the prohibition of offering staking, peer-to-peer transactions, participating in Initial Coin Offerings (ICOs), or lending for decentralized finance activities.

PayPal Successfully Registered with UK's FCA

The official announcement from the Financial Conduct Authority (FCA) shows on the Crypto Companies Register website that PayPal, under the name PayPal UK, has been approved by the FCA to offer cryptocurrency services in the UK.

A spokesperson for PayPal stated:

The FCA has approved the registration of PayPal UK, making it an authorized electronic money institution and consumer credit firm, as well as registered as a provider of crypto asset services.

Furthermore, following this approval, PayPal's UK users will be transferred from PayPal Europe to the new entity, PayPal UK.

Stricter Regulations Ahead for PayPal Operations

However, according to the registration details, FCA will have the authority to impose requirements or restrictions on the financial services activities that PayPal can conduct:

The platform will be prohibited from expanding its current crypto products into other unlicensed activities by the FCA, including but not limited to staking, peer-to-peer trading of crypto assets, participating in initial token offerings, and decentralized financial activities such as lending.

It is reported that PayPal began offering cryptocurrency services in the UK in August 2021, allowing local customers to buy, sell, and hold certain tokens through the PayPal website or mobile app, but without the ability to transfer them to other wallets, and held and custodied by PayPal and its affiliates.

Cryptocurrency Purchase Services Still Suspended

Previously, following FCA's approval of the Financial Services and Markets Bill (FSMB) in June and subsequent strict restrictions on crypto company advertisements, PayPal revealed in August that it would suspend cryptocurrency purchase services for UK users starting from October, seemingly in preparation for the new regulations.

Despite this, a spokesperson for PayPal claims that the registration with FCA in the UK is not related to the suspension announced in August.

Over the past year, PayPal has been actively expanding its business into the realm of crypto payments and transactions, not only launching its stablecoin $PYUSD but also developing systems for NFT trading and transfers, and even planning to offer customized services in the metaverse.