In late August 2021, PayPal announced that it would allow UK users of the service to buy, hold and sell four different cryptocurrency types through its platform. The announcement follows the launch of a similar service in the US in early 2021. Of the UK launch, PayPal says, “Our global reach, digital payments expertise, and knowledge of consumer and businesses, combined with rigorous security and compliance controls provides us the unique opportunity, and the responsibility, to help people in the UK to explore cryptocurrency”.
Here, we take a look at what the service entails, and what it means for UK investors.
How does Paypal’s cryptocurrency service work?
The new cryptocurrency service from PayPal allows UK PayPal users to buy, hold and sell cryptocurrency through the regular PayPal platform. At present, it includes four different cryptocurrency types – Bitcoin, Ethereum, Litecoin and Bitcoin Cash – as well as educational information about cryptocurrency trading, plus a tab to show cryptocurrency prices in real-time.
Users can purchase the cryptocurrency of their choice from as little as £1, charging fees for trades and using Paxos as its platform of choice.
In the US, PayPal users are also able to purchase from selected businesses using their crypto funds – a service that is, as yet, unavailable in the UK. Unlike other crypto trading platforms, those who purchase cryptocurrency via PayPal will be unable to transfer their holdings outside of their PayPal wallet.
What does this service mean for UK investors?
The aim of this service is, according to PayPal, to provide an easier point of entry to the cryptocurrency market. “The tokens and coins have been around for a while but you had to be a relatively sophisticated user to be able to access that,” says Jose Fernandez da Ponte, General Manager for Blockchain, Crypto and Digital Currencies. “Having that on a platform like ours makes a really good entry point.”
In the US, the service has proved popular, with PayPal saying, “Consumers who buy, hold and sell cryptocurrency on our platform in the U.S. log on at 2x their previous rate”. In the UK, the company plans to establish demand before rolling out other features.
It remains to be seen whether PayPal can compete with other platforms, such as investment apps, but with a trusted name entering the market, could it mean that cryptocurrency demand will increase still further?
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