Fintech giant PayPal (NASDAQ:PYPL) has secured the approval of the U.K.’s Financial Conduct Authority (FCA) to offer certain crypto services in the country. The approval comes at a time when the U.K. government has tightened the regulatory environment for the crypto sector, with plans to regulate crypto players under the Financial Services and Markets Act.
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PayPal Secures FCA Approval
As per the FCA’s website, PayPal UK Limited secured registration on Tuesday for “certain cryptoasset activities.” Companies that intend to offer crypto services in the U.K. must be approved via the FCA’s registration and comply with the regulatory authority’s anti-money laundering rules.
As per the company, the FCA has approved PayPal UK Limited as an authorized electronic money institution and consumer credit firm. It has also obtained registration as a crypto asset business.
It is important to note that in August, PayPal said that it was temporarily halting its crypto purchases in the U.K., effective October 1, to comply with stricter rules by the FCA. Back then, the company said that it expects to remove the pause in early 2024. As per a company spokesperson, attaining the latest approval does not impact the previously announced pause on crypto purchases.
With the FCA’s approval, PayPal’s U.K. customers will be moved from PayPal Europe to the new entity PayPal UK Limited due to Britain’s exit from the European Union.
Is PayPal a Buy, Sell, or Hold?
PayPal shares were trending higher on Thursday morning as investors cheered the company’s better-than-anticipated Q3 2023 earnings. The upbeat earnings report made investors ignore the company’s disclosure about a subpoena received on November 1 from the Securities and Exchange Commission (SEC) requesting documents related to its PayPal USD stablecoin (PYUSD), launched in August.
Wall Street is cautiously optimistic about PayPal, with a Moderate Buy consensus rating based on 18 Buys and 11 Holds.
Shares are down 22% year-to-date. The average price target of $80.37 implies 56% upside potential. Analysts might revise their price target in response to the Q3 results.
