Yesterday, Reuters reported that PayPal will suspend the ability to purchase Bitcoin and crypto for its customers starting in October.
The issue, however, is much more complex than how it has been portrayed by many, and will likely have little impact on the operations of the platform’s users in the crypto markets.
PayPal: the suspension of Bitcoin and crypto
First, it is important to point out that this is a temporary suspension. That is, it will begin in October, but could end as early as early 2024.
In addition, it will only affect users resident in the UK, i.e. a small portion of PayPal’s customers.
The problem is that in the UK they are working on a new legal framework to regulate cryptocurrencies and their use, and the company has decided to take some time to try to figure out how to become compliant with the new rules as well.
For some time now, the British government and parliament have been working on a set of new rules to regulate the crypto sector in its entirety.
This process is still a work in progress, and at this stage, as the regulatory framework is not yet complete, there is a risk of making mistakes.
PayPal is a company that is now rightfully among those who enforce the law in the most precise and dutiful way possible, so it is rather obvious that in such a situation it does not feel like taking risks.
Besides, Britain is not one of their main markets, and buying and selling Bitcoin and cryptocurrencies is not one of their main services either.
In light of this, it is hardly surprising that, out of sheer precaution, they decided to take some time to study the evolving situation in order to be able to act accordingly, and this led them to opt for a temporary suspension of the crypto service in the UK.
New, stricter regulations will come into force in the UK on 8 October, which is why the suspension will begin on the first of the same month. However, if everything goes as planned, this suspension could be lifted in early 2024.
The rest of the world
As this decision is specifically linked to the evolving UK regulatory framework, it will have no impact on operations in the rest of the world.
It is worth noting, however, that the crypto services offered by PayPal are only active in certain countries.
Certainly the most important market is the US, where they continue to offer the same services they announced in late 2020, which helped kick-start the most recent big bull run.
To be fair, the regulatory situation with regard to cryptocurrencies in the US is also still in flux, but since the US regulators are still far behind, there is no news so important as to make PayPal take action in the short term.
The matter is still different in Europe, and particularly in the Eurozone.
In fact, the company has not yet opened its crypto services to Europeans, probably still due to regulatory issues. The EU has just adopted a very precise framework on the use of cryptocurrencies, although it will only come into force next year.
At this point it is to be expected that, as soon as the new rules decided by the EU are incorporated into the jurisdictions of the various EU countries, PayPal may start opening its crypto services also to residents of some European countries.
However, the situation as a whole remains very unclear, as is normal when innovations of this calibre burst onto the world scene.
Ledger and PayPal
Meanwhile, Ledger has announced the integration of PayPal as a means of payment within Ledger Live.
Ledger Live is in fact not only a wallet, but also allows Bitcoin and cryptocurrency purchases. With this new integration, it will be possible to use PayPal as a means of payment to make crypto purchases on Ledger Live.
Yesterday, another piece of news also circulated, which later turned out to be unconfirmed, according to which there was a new partnership between Ledger and PayPal.
This was probably just an incorrect interpretation of the above news, i.e. the simple addition of PayPal among the various means of payment on Ledger Live.
Source: https://en.cryptonomist.ch/2023/08/17/paypal-suspends-bitcoin-crypto-purchases/