The global online payments company, PayPal is planning to pause cryptocurrency sales for a minimum of three months starting October 1 for users in the UK. This unprecedented move is a response to the new regulations introduced by the UK’s watchdog.
In a message to its users cited by Forbes, PayPal announced its compliance-driven decision, indicating that customers can still hold and sell their existing crypto assets while the platform adjusts to the evolving regulatory landscape.
FCA’s New Measures
PayPal’s decision coincided with the upcoming implementation of the Financial Conduct Authority’s (FCA) measures, including risk warnings and cooling-off periods for new cryptocurrency users. Set to be enforced in October, the FCA’s package of measures requires clearer disclosure of risk for cryptocurrency companies. Additionally, these measures introduce a 24-hour grace period for customers to reconsider their investment decisions.
PayPal’s response is part of a growing trend of financial institutions in the UK aligned with regulatory demands in the cryptocurrency space, Forbes reported. Major lenders like HSBC, NatWest, and First Direct have already imposed a daily limit on cryptocurrency transactions.
PayPal Enters Stablecoin Space
However, despite the pause in crypto sales, PayPal continues to expand its products and services. Recently, Finance Magnates reported that the company had unveiled its own US dollar-pegged stablecoin, PayPal USD (PYUSD).
In a statement, the online payments giant stated that PYUSD represents an important bridge between the fiat currencies and digital asset space. This move reportedly aims to enhance digital asset payments and their compatibility with popular exchanges, wallets, and Web 3 applications. Each unit of PYUSD has a value equivalent to one USD.
PayPal USD is issued by Paxos Trust Company, a licensed limited-purpose trust company subject to regulatory oversight by the New York State Department of Financial Services. Additionally, the stablecoin is reportedly backed by short-term US Treasuries and similar cash equivalents.
This article was written by Jared Kirui at www.financemagnates.com.
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