JAKARTA - On August 14, PayPal sent emails to some of its users stating that cryptocurrency purchase services will be temporarily suspended in the UK in the coming months.
The message explains that the purchase service will be disabled from October 1, 2023, with plans to reactivate it in early 2024, a date still to be set.
Although the purchase service will be deactivated, PayPal insists that users can still store and sell cryptocurrencies owned during the service disruption period. However, the company has not provided a description of whether users will be allowed to transfer their cryptocurrencies to wallets or other exchanges. Currently, it appears that this feature is only available to users in the United States.
In an effort to provide users with a sense of security, PayPal guarantees that their crypto assets will remain secure and also claims that no fees will be charged for the storage. The company also apologizes for the inconvenience experienced by customers.
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The announcement comes after PayPal introduced a change in service in line with the implementation of a new rule from the UK Financial Conduct Authority (FCA). According to PayPal, the rule requires them to "take additional measures before customers can purchase cryptocurrencies."
Although PayPal does not provide detailed details about the rules in question, it is explained that the UK will impose Crypto Travel Rules from September 2023. This rule requires crypto companies to gather information related to transactions, despite the discrepancy between the deadline for implementing these rules and PayPal's decision to temporarily suspend crypto purchase services in October.
In addition, recently the FCA also implemented a new promotional rule regulating how promotions or ads related to cryptocurrencies can be accessed by potential investors. Although this rule will be enforced from October, the description of the requirements from PayPal does not appear to be in full line with this rule.
PayPal's decision to reduce its services in the UK has an important impact given that the company is currently expanding its crypto offerings in the United States. In this context, the company also announced plans to release its own USD stablecoin on August 7.
In addition, an executive from PayPal also indicated the potential use of this stablecoin in DeFi. In another development, the report also states that PayPal has integrated crypto features into the "Cryptocurrency Hub."
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