PayPal enters the cryptocurrency market

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PayPal is gearing up to allow its UK users to buy and sell cryptocurrencies on the platform.

The crypto service is already available to its US users but now it’s gradually being rolled out this side of the Atlantic.

Initially you’ll only be able to trade Bitcoin, Ethereum, Litecoin and Bitcoin Cash.

There are two sets of fees to consider, which is actually quite a lot less confusing than some of the other crypto exchanges out there, but it might end up costing you more.

First, there’s the transaction fee, which is 50p for transactions that are less than £25. For anything over that, it works on a percentage basis, starting from 2.3% and falling to 1.5% for larger trades.

For comparison, the fees at Binance, which is one of the cheapest trading platforms (although currently banned by the Financial Conduct Authority), is only 0.1%, falling to as low as 0.02% for those who trade a lot.

On PayPal, you also have to pay an exchange rate fee on both the sale and the purchase as the value of the cryptocurrencies are all quoted in US dollars – assuming you only have pound sterling in your account.

This is quite normal as most exchanges value cryptocurrencies in dollars or sometimes euros, but the exchange rates provided by PayPal are not always the most competitive.

Fees aside, PayPal being in the crypto business could mean it’ll be much easier to spend your coins on everyday purchases in the future.

You might not want to though, as every trade is subject to capital gains tax in the UK.