The battle against fiat is up and in full swing globally. PayPal – one of the largest payment companies globally with a market capitalization of $ 240 billion – will soon enable U.S. customers to buy, HODL, and sell bitcoin, bitcoin cash, ether (the crypto that powers Ethereum), and Litecoin.
The surge in crypto adoption, in general, has attracted scrutiny from FCA more than ever before. Controlled by the U.K.’s Treasury and Parliament, FCA protects consumers, financial markets and promotes competition.
Strict Scrutiny Could be an Issue
Currently, cryptocurrency is strictly controlled by regulators and has always been the case in recent years. The FCA is trying to collect data and explains that the purpose of the regulation proposal they listed earlier is to obtain company-specific information to assess its approach to surveillance, analyze trends, and identify emerging risks within and between sectors.
The enhanced review could allow the FCA to investigate the implementation of additional requirements on crypto-asset exchange providers. The consulting paper said the FCA might require other reporting requirements for the cryptocurrency business in the future. However, regulators will undertake additional consultations before extending disclosure requirements beyond the scope of this proposal.
The FCA has warned that different guidelines may also apply to regulated corporations and senior managers using unregulated crypto-belongings. Corporations such as Paypal will also need to recollect how to mitigate the regulatory and economic crime dangers of crypto-asset companies, given the regulatory tour’s direction.
Users Cannot Transfer Crypto Out of Paypal
Despite the hype surrounding Paypal’s move, one major thing worth noting is that it doesn’t allow anyone to transfer crypto from their wallet to another wallet, even if it’s a different PayPal wallet or deposit crypto from another wallet.
The user does not have access to his private key. Instead, everything has to be handled via PayPal. And while PayPal claims that it will allow its users to pay with crypto to 26 million merchants on its platform, the merchant doesn’t accept crypto payments – it will be converted back to fiat for a hefty fee (2.3% for transactions under 100 USD). These two decisions by Paypal are raising concerns about allowing crypto on its platform. However, as you can imagine, Bitcoin took over the news like that, jumping $ 13,000 at one point to trade at its highest price since July 2019.