With plans for its own stablecoin, PayPal announced further ambitions in the crypto sector in the previous week, but elsewhere the business with Bitcoin and Co. is stalling: In the UK, the fintech company will soon have to pause its crypto offering. The reason is new regulatory requirements.
As can be seen from an email to British customers, PayPal will “temporarily suspend” the functions for buying cryptocurrencies via the platform from October 1st. The reason, it said, is measures to implement a new regulation that will come into effect on October 8th.
Specifically, this involves rules for advertising financial products and services, which were recently revised and now explicitly include crypto assets for the first time. Accordingly, all crypto companies advertising in the UK must ensure that people are adequately informed about the risks involved. New customers must also be given a 24-hour cooling-off period before making their first trade.
According to PayPal, it will likely take until early 2024 for the new requirements to be implemented and for UK customers to be able to buy cryptos through the PayPal app again. However, holding and selling coins should still be possible for users who are already invested at any time during this phase, the company stressed.
Read more about PayPal and why the company is pausing its crypto offering, and find the latest financial news of the day with the Born2Invest mobile app.
Crypto remains a gamble
The impact of this forced pause on operations is likely to be limited, but it highlights the risks of PayPal’s comparatively early involvement in the crypto sector. Given the ongoing regulation of the young asset class, this is unlikely to be the last time that the fintech group will have to adapt its offering to new legal requirements.
This is especially true for the planned PayPal USD stablecoin. It is expected to be launched in the U.S. soon, although Congress is still struggling with the regulation of cryptocurrencies in general and stablecoins in particular.
PayPal is taking a risk with its crypto ambitions, but could thus be one of the pioneers on the path to the payment system of the future.
The associated long-term opportunities are currently overshadowed, however, by mixed quarterly figures and the exit of the major investor Elliott. Investors should therefore keep an eye on the stop at 50 euros.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
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First published in DER AKTIONAR. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us
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