The UK’s financial regulator, the Financial Conduct Authority (FCA) announced new regulations aimed at enhancing consumer protection in the crypto space in June which are to take effect on 8 October. According to PayPal, it expects to recommence crypto buying in early 2024.   

The new regulations include limitations on advertisement of cryptocurrencies to UK consumers. Crypto firms will also be obligated to display risk warnings, and discontinue “refer a friend” initiatives. 

The FCA says the new rules make sure people have the appropriate knowledge and experience to invest in crypto.

“Research shows many regret making a hasty decision. Our rules give people the time and the right risk warnings to make an informed choice,” said Sheldon Mills, executive director of consumers and competition at the FCA. 

This being the case, PayPal has implemented a “temporary pause” in the option for UK customers to purchase cryptocurrencies as it works to align with the new regulatory landscape. 

Customers will retain the ability to hold and sell existing cryptocurrencies at this time. PayPal has also emphasized that existing crypto holdings are secure and won’t incur charges during this time.

“We consistently collaborate with regulatory bodies worldwide to ensure compliance with relevant rules and regulations in the markets we operate in,” said PayPayl in an email to customers.

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The push to regulate crypto was prompted by the collapse of crypto firms like FTX, which led to billions of customer’s investments being lost. While the crypto markets remain volatile, the leading coin – Bitcoin – has rebounded approximately 76% this year. 

The announcement also comes on the back of PayPal’s launch of a US dollar stablecoin. Stablecoins are a cryptocurrency designed to maintain a stable price by being tied to an asset. This new stablecoin will be redeemable 1:1 with the US dollar and has hinted at its potential use within the decentralized finance (DeFi) space.