PayPal is to allow users in the UK to buy, hold and sell cryptocurrencies through the payment platform for the first time.
The firm said it would allow customers to choose from four types of cryptocurrency – bitcoin, ethereum, litecoin and bitcoin cash – and that the service would be available via the PayPal app and its website.
A crypto tab will be added to the platform, showing real-time currency prices as well as offering educational content to help answer common questions and learn more about cryptocurrencies, including the potential risks, PayPal said.
The payment company said it hoped that the move to embrace the currency would help improve knowledge and understanding of it.
Cryptocurrencies remain controversial because of their lack of regulation and volatile value fluctuations, and some critics have raised concerns about the anonymity offered to users as part of transactions, arguing the currencies are used by cybercriminals to hide their activities.
Jose Fernandez da Ponte, the vice-president and general manager for blockchain, crypto and digital currencies at PayPal, said the firm’s service could help introduce more people to the technology and how it works, helping to better shape the role the currencies could play in the future.
“The pandemic has accelerated digital change and innovation across all aspects of our lives, including the digitisation of money and greater consumer adoption of digital financial services,” he said.
“Our global reach, digital payments expertise, and knowledge of consumer and businesses, combined with rigorous security and compliance controls provides us the unique opportunity, and the responsibility, to help people in the UK to explore cryptocurrency.
“We are committed to continue working closely with regulators in the UK, and around the world, to offer our support and meaningfully contribute to shaping the role digital currencies will play in the future of global finance and commerce.”
PayPal confirmed the service would begin rolling out this week and would be available to all eligible customers within the next few weeks.
The firm has launched a similar service in the US, which allows users to make purchases at participating businesses using cryptocurrencies – a feature that has not yet been confirmed for release in the UK.
Laith Khalaf, the head of investment analysis at the financial firm AJ Bell, said he expected the service to be added in the UK at some point soon.
Khalaf said there were signs investors were “leapfrogging traditional forms of savings and diving in at the deep end by investing in crypto”, and that the City regulator was concerned about the potential for consumer harm posed by volatile pricing.
“An alarming statistic is that 14% of UK crypto buyers funded their purchases using debt, according to figures released by the FCA in June. While many are no doubt using crypto as a bit of harmless fun with small amounts of money they can afford to lose, some consumers are at risk of getting sucked in and spat out by the crypto craze,” he said.
“PayPal’s presence is positive in that it is a high-profile, publicly listed company, which is already subject to regulatory scrutiny. But overall the crypto craze remains a worry for consumer advocates and regulators.”