CEX.IO company blog | PayPal extends crypto services to UK residents

Opinion of Yuri Mazur, Head of Data Analysis Department, CEX.IO Broker

The popularity of digital assets does not dependonly on how much they say about them in the media, butand how and by whom they are accepted as legal tender. The ability to survive a rather difficult time of the pandemic has played into the hands of the crypto community and crypto investors. Last year, in this regard, large payment services and companies began to pay attention to digital assets. The result was multi-billion dollar investments in bitcoin by Elon Musk's companies - Tesla and SpaceX.

PayPal has become a de facto pioneer amongmajor international payment services, including the ability to pay with cryptocurrencies in their services. At the very beginning, the experiment extended to residents of the United States. Then the company motivated this decision by the fact that it wants to test the popularity of the service among consumers. In case of a successful experiment, PayPal intended to expand crypto services to other jurisdictions where, in the corporation's opinion, there will be demand for such services. However, even the launch of such an experiment forced such giants of the payment industry as Visa and Mastercard to join the race and announce the introduction of crypto services into their services.

Adoption by major industry players of digitalassets in one form or another increases the level of confidence in cryptocurrencies on the part of the population, and also contributes to their integration into the traditional financial system. Companies themselves receive certain bonuses when introducing cryptocurrencies, as they expand their active audience and increase their popularity with minimal investments in advertising and marketing. For example, to revive the information background around Twitter, it was enough to announce the possible integration of Bitcoin into the social network’s services.

At the same time, it should be noted that the extensionPayPal's cryptocurrency service to the UK is no accident. The company's management initially intended to introduce the service for the use of cryptocurrencies in stages and in jurisdictions where digital assets are popular and regulators are relatively loyal. It was the fulfillment of these two parameters that was, in our opinion, the reason for choosing Great Britain as the next goal.

Вполне логично, что страна стала следующей для expansion of the PayPal crypto service, because here, according to various sources, about 5% of the population owns digital assets, which is at least 3.3 million people. At the same time, the Central Bank of Great Britain demonstrates a relatively restrained attitude towards cryptocurrencies. Crypto exchanges and the ability to trade digital assets are allowed here. The main condition of the regulator is to comply with the laws and conditions of the license.

However, it is worth noting that manybanking services in Britain see risks in working with cryptocurrencies, primarily due to possible conflicts with the FCA (British Financial Regulator). However, these risks are not as great as, for example, in Turkey, where cryptocurrencies are also popular, but the policy of the authorities is unfriendly.

In Russia there are services similar to PayPal,such as Qiwi, Webmoney, Yumani, however, their actions fall under the regulation of the Central Bank of the Russian Federation, whose attitude towards cryptocurrencies is very ambiguous. Therefore, we can hardly expect from Russian payment services the possibility of developing cryptocurrency services within Russia. However, if such services appear, they may well become popular among Russians. As of September 2020, Russia entered the top 15 countries by the number of cryptocurrency owners, having overtaken the UK in this indicator.

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