Cryptocurrency round-up: PayPal taps into UK crypto market and FCA blacklists Binance

In a mixed week for crypto, PayPal taps into the UK market and the FCA blacklists Binance. Saloni Sardana looks at the week in crypto.

(Image credit: © Chesnot/Getty Images)

Cryptocurrencies were dominated by news that one of the world’s largest payment processors, PayPal, will allow UK users to buy and sell cryptocurrencies on the platform.

Here are the top stories that caught our eye.

PayPal taps into the UK crypto market

PayPal – one of the worlds’ largest payment processors – is tapping into the UK crypto market by allowing its UK users to buy, hold and sell virtual currencies.

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PayPal’s new service which was rolled out this week is available on both the website and the app. To begin with only four of the leading cryptocurrencies – Bitcoin, Ether, Litecoin and Bitcoin Cash – will be offered.

PayPal’s announcement marks the company’s first crypto offering outside the US. The company said the move was inspired partly by the technological acceleration driven by Covid-19 and lockdown measures.

PayPal – perhaps trying to pre-empt any critics – said there was an educational element to its offering as well. “By accessing their PayPal account via the website or the mobile app, they 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,” the firm said in a statement.

All eligible UK customers, once officially verified, can access the new crypto tab either through the website or through the app.

Customers can start by buying as little as £1 of cryptocurrency via PayPal. No fees will be levied to hold cryptocurrencies in an account, but there are transaction fees and currency conversion fees. In all, PayPal users will be able to buy or sell up to £35,000-worth of crypto a year, or £15,000 in any one transaction.

UK regulator says that Binance is incapable of being regulated

The world’s largest cryptocurrency exchange was “effectively blacklisted”, as the thisismoney website put it, in the UK on Thursday after the Financial Conduct Authority - the UK regulator – said the exchange was not “capable of supervision”.

The FCA said Binance poses a “significant risk to consumers”. However, UK users of Binance can still use the exchange’s website as the website is not tied to Binance’s UK entity.

The FCA’s comments come as central banks and regulators are alarmed at the breakneck speed at which cryptocurrencies are growing.

It also comes after traders who were seeking compensation from Binance for an outage earlier in May secured more than $5m in funding for an international arbitration case against the cryptocurrency exchange.

The outage was related to China’s crackdown on the cryptocurrency sector in May, which wreaked havoc in crypto markets.

Crypto markets update

Here’s what happened in the crypto market in the last seven days

  • Bitcoin rose 2.6% to $48,335.
  • Ether rose 1.1% to $2,356.
  • Dogecoin fell 10.9 % to $0.29.
  • Cardano rose 16.3% to $2.85.
  • Binance Coin rose 12.3% to $488.

What investors need to watch out for

  • Cardano’s “Alonzo” Upgrade. The upgrade is due to launch in mid-September. The Alonzo hard fork will pave the way for much-anticipated adoption of smart contract functionality.
Saloni Sardana

Saloni is a web writer for MoneyWeek focusing on personal finance and global financial markets. Her work has appeared in FTAdviser (part of the Financial Times),  Business Insider and City A.M, among other publications. She holds a masters in international journalism from City, University of London.

Follow her on Twitter at @sardana_saloni