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PayPal UK says users can now use crypto on its platform, but adds that users must convert to fiat before taking funds out.
PayPal Holdings Inc (NYSE: PYPL) now allows its UK customers to buy and sell crypto. The financial technology giant, based in San Jose, California, announced that all eligible customers can trade Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. PayPal first entered into the world of digital currencies in October, with plans to expand its crypto functionality to the US. After covering America, the company announced in February that it would also begin to expand to other parts of the Western Hemisphere. By late August, PayPal began proceedings for the crypto offerings service in the UK. For this UK rollout, PayPal is again enlisting the services of Paxos just like it did for its US launch. Paxos is a New York-regulated digital currency company.
Jose Fernandez, who leads the PayPal blockchain and crypto efforts, weighed in on the latest UK service development. He said PayPal intends to play a key role in shaping the role of crypto in global finance. Fernandez said:
“We are committed to continue working closely with regulators in the UK, and around the world, to offer our support and meaningfully contribute to shaping the role digital currencies will play in the future of global finance and commerce.”
Fernandez also added that PayPal expects the new crypto rollout in the UK to emulate the success of its US version. In addition to trading crypto on the platform, users will also be privy to crypto-price tracking and educational content.
Operational Caveats to Consider in the PayPal US and UK Crypto Services
Using the digital currencies on PayPal’s platform comes with some conditions. Users can only ‘buy, sell, and hold’ crypto within the confines of PayPal’s blockchain. This means that they cannot access their private crypto keys and also cannot transfer crypto out of the PayPal platform. In addition, users can not use the tokens to directly pay for goods and services. The multinational online payments company released an explicit statement which said:
“When you buy crypto on PayPal, we give you the rights to that crypto, but do not provide you with a private key. This helps us protect your holdings against hacks and other malicious attacks.”
This means that users intending to spend on their crypto holdings will need to first transfer it back into fiat currencies. PayPal’s ‘Checkout with Crypto’ payment method, which is available to its US users, facilitates this automatically.
A significant portion of the crypto community reacted strongly to the PayPal ‘no private key’ policy when it debuted in America. Aggrieved parties, which comprised mostly crypto veterans crypto, argued that not owning the keys meant not really owning the crypto.
Crypto Service Seems User Friendly
Buying, selling, and holding crypto using PayPal accounts is fairly easy and straightforward. Users will have to first sign into their respective PayPal accounts and select ‘Crypto Section’. In this section, users will select the listed digital currency of their choice and go through some KYC compliance checks. This includes entering personal information, sending identity proofs, and knowing about risks associated with crypto. Additionally, PayPal will review the submitted data and successful applicants can now proceed to the crypto amount and payment method.
PayPal is also currently on a crypto-related job hiring operation in Ireland. The company intends to fill up several positions for its business unit that pertains to digital assets.