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PayPal launches UK cryptocurrency service

Emma Lunn
Written By:
Emma Lunn

The new service will start being rolled out this week and will initially be limited to Bitcoin, Ethereum, Litecoin and Bitcoin Cash.

By accessing their PayPal account via the website or the mobile app, PayPal users can view real-time crypto prices, access educational content to help answer commonly asked questions, and learn more about cryptocurrencies, including the opportunities and risks.

This move marks the first international expansion of PayPal’s cryptocurrency offering outside of the US. PayPal users in the States can also use ‘Checkout with Crypto’ which enables them to spend cryptocurrencies when making purchases with online merchants. PayPal has also introduced crypto services on its mobile payment service Venmo in the US.

Jose Fernandez da Ponte, vice president of blockchain, crypto and digital currencies at PayPal, said: “The pandemic has accelerated digital change and innovation across all aspects of our lives — including the digitisation of money and greater consumer adoption of digital financial services.

“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. 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.”

Customers can start by buying as little as £1 of cryptocurrency through PayPal. To purchase cryptocurrency, eligible customers can log into their PayPal account via the website or their mobile app, navigate to the new crypto tab to view the four cryptocurrencies available, and view current pricing and trends.

Customers can choose from pre-determined purchase amounts or enter in their own purchase amount, before following the prompts to buy the cryptocurrency of their choice.

Customers will be able to fund their PayPal account for the purchase using their bank account or debit card. PayPal says that if customers choose to sell cryptocurrency, funds will normally be available ‘quickly’ to spend in their PayPal account.

There are no fees to hold cryptocurrency in a PayPal account.  However, there are transaction fees and currency conversion fees for buying and selling cryptocurrencies.

Laith Khalaf, head of investment analysis at AJ Bell, said: “The ability to trade cryptocurrencies is nothing new, but the significance of PayPal’s entry into the UK market is its potential to process crypto transactions between consumers and businesses. This isn’t a service which will be offered at outset in the UK, but it’s already up and running in the US, where PayPal’s crypto ventures only began last October, so we can expect pretty rapid development on this side of the pond too.

“Of course, there’s still the issue of consumer and business demand to transact in crypto. What’s more it’s questionable how many businesses that do accept crypto will want to hold onto it after the transaction has taken place, rendering such a transactional facility little more than a sales gimmick. Crypto is clearly hugely volatile, and while businesses have bills to pay in dollars, pounds and euros, they’re unlikely to want to store lots of crypto on their balance sheet, lest prices take one of their habitual nosedives. Of course, currently consumers get paid in traditional currencies too, so if crypto is being exchanged at both ends to facilitate a transaction, it’s really just a digital fig leaf covering up a payment that could have been made without it, minus the costs of conversion, not to mention the additional energy used in mining crypto.

The UK cryptocurrency service will start being rolled out to PayPal customers this week and will be available within the next few weeks for all eligible customers.