PayPal has gained a green light from the regulators in the UK regarding cryptocurrency services. However, the Financial Conduct Authority (FCA) has imposed some conditions on the digital payment platform.
The FCA has mandated all digital payment firms in their jurisdiction to impose some restrictions such as account verification to inhibit illegal trading options. In accordance with the regulatory directions, PayPal is not adding new consumers, and only old account holders on the platform are able to access the cryptocurrency trading services.
On the other hand, PayPal is also unable to carry out financial services such as ICOs or launch new coin offerings like cryptocurrency exchanges. On the other hand, the digital payments platform will now announce native crypto trading notifications regardless of the strict rules concerning marketing.
The firm halted crypto purchases for its UK wing on a temporary basis to complete the regulatory requirements. Meanwhile, legislators in the UK are also working on bringing new regulatory guidelines for cryptocurrency firms in the sector.
Research Paper on Crypto Regulation
Government officials of the UK have published their response regarding a crypto regulatory research paper submitted earlier this year. The scope of the legislative document is to bring cryptocurrencies in the purview of financial regulations that are imposed on banks and other financial services providers.
Andrew Griffith, financial services minister for the UK, recently told the media that these regulatory changes a final proposal for regulators on behalf of its government officials. He further maintained that he intends to work in tandem with the regulators to adopt the new regulatory framework for the crypto sector.
He retained that various bills have been presented to Congress on the same subject in the USA. However, the country has yet to introduce crypto regulations on a federal level. Oliver Linch, CEO of Bittrex Global also shared his review of the paper.
He retained that the move marks the first time when regulators in the UK will treat cryptocurrencies as a developed sector in regard to retail and commercial investment products. He said that the cryptocurrency investors in the UK seem to be disappointed that legislators in the UK are not adopting a framework such as MiCA or VARA.
UK as a Crypto Hub
UK PM Rishi Sunak talked about the UK as the next potential cryptocurrency hub. However, the sector has faced some strict regulations from the FCA officials on account of concerns around consumer safety and investor protection.
The paper reviewed by UK officials recently intends to address both aspects. Linch retained that the nation is setting a new standard by adding digital currencies to the same legislative umbrella that governs the rest of the financial sector.
UK government officials have agreed with the stance of Bittrex Global that digital currency markets are another part of the financial sector. He further noted that the goal of the regulators in the UK is not to surpass the EU or Dubai but rather to create a secure and nourishing path for cryptocurrency investors.
He noted that it is possible that cryptocurrency firms in the country may have to relocate or set up operations. In this manner, the region can complete its goal to emerge as the next crypto hub and ensure security for citizens who are participating in the growth and development of the sector.