PayPal is finally launching its cryptocurrency service in the UK. The US online payments giant announced on Monday (8/23), it would let all British customers buy, hold, and sell digital currencies starting this week. Customers will be able to select from four types of cryptocurrency, such as bitcoin, ethereum, litecoin, and bitcoin cash. The service itself will be available through the PayPal app and website. According to PayPal, a crypto tab will be added to the platform, displaying real-time currency prices and educational content to help answer common questions and learn more about cryptocurrencies, including the potential risks. This UK breakthrough marks the first international expansion of PayPal's crypto product, which primary launched in the US in October last year. Jose Fernandez da Ponte, PayPal's general manager for blockchain, crypto and digital currencies, on Monday (8/23), informed CNBC, "It has been doing really well in the US, and we expect it's also going to be doing well in the UK." Similar to the US version of the product, PayPal is relying on Paxos, a New York-regulated digital currency company, to enable crypto buying and selling in the UK. To launch its services, Paypal has engaged with relevant UK regulators to ensure the role of digital currencies and how it is safe to use. This crypto service is similar to one from UK fintech firm Revolut. PayPal users, like Revolut users, are unable to move their crypto holdings outside of the app. Its entry into the cryptocurrency market intends to make it easier for users to participate in the market.
PayPal has benefited greatly from the COVID-19 pandemic, as more individuals used its services to shop online and pay bills rather than going out. Businesses flocked to PayPal as they were compelled to take their stores online, enabling the corporation to process $311 billion in payments in the second quarter ended June 30, up 40% from the previous year, and create 11.4 million net new active accounts. PayPal said it expected third-quarter net revenue to be in the range of $6.15 billion to $6.25 billion, up 13 percent to 14 percent at current spot rates, but falling short of analysts' expectations of $6.45 billion. Credit Suisse analyst, Timothy Chiodo, said on Thursday (7/29) that PayPal continues to generate impressive growth numbers at scale and has several wildcards that could contribute in the future. From the time the market started on August 23 to the time it closed on August 24, PayPal holding shares (NASDAQ: PYPL) had gained 1.29 percent.
Regulators in the UK have been leerier of the emergence of digital currencies, casting doubt on the debut of Paypal's crypto service in the country. In accordance with that, central banks are looking at the possibility of issuing their digital currencies, as cash usage in several wealthy countries continues to decline. In April, the UK Treasury and Bank of England said they would evaluate the potential launch of a digital version of the British pound, dubbed "Britcoin" by the British press. In June, the Financial Conduct Authority (FCA) imposed a ban on the British Subsidiary of Finance, Binance, the largest crypto exchange, citing a failure to meet money-laundering regulations. Responding that, Paypal's Vice President and General Manager for Blockchain, Crypto and Digital Currencies, Fernandez da Ponte stated that the Central Bank Digital Currencies (CBDC) is considered a "fantastic prospect", but it would require policymakers some time to clear out the key issues involved. Regarding the legality, he stated that "We are committed to continuing 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." on Monday (8/23). All in all, despite the limitations of UK regulations, Paypal nevertheless aims to offer a new viewpoint in digital money to the nation. As of now, PayPal customers in the UK can buy, hold and sell cryptocurrency on the platform. PayPal payments, on the other hand, can not be made in Bitcoin. Therefore, it is sold for traditional currency, and its value will be used for its cash payments. Hereafter, with more people becoming more aware of the resurgence of cryptocurrencies, its liquidity may be converted without any further difficulties, allowing crypto to be used as payments in various sectors, hence utilizing a new payment system going forward.
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