PayPal, a fintech giant, has stopped work on its stablecoin project due to the crackdown by the United States regulatory agencies on the crypto sector.
Bloomberg reports that PayPal Holdings has stopped working on its stablecoin, as the U.S. regulatory bodies increase their scrutiny of crypto. The New York State Department of Financial Services has launched a probe into Paxos, further complicating PayPal’s problems. According to Reuters, PayPal was developing its own stablecoin in collaboration with Paxos Trust Company, a stablecoin issuer.
Bloomberg reports that PayPal had planned to launch its stablecoin within the next few weeks. However, the launch was delayed by increased regulatory scrutiny of crypto related firms since the start of the year. After the failures of many industry leaders in 2022, U.S. regulators have taken a more strict approach to the crypto sector. The SEC has recently been looking into Kraken, a crypto exchange. This is due to its staking program. As part of a settlement, the exchange agreed to pay $30M in fines to SEC and close its staking operation. PayPal stated that it would continue to develop its stablecoin project and will work closely with regulators in order to ensure compliance with all regulations from the U.S. authorities. A spokesperson for PayPal, Amanda Miller, stated:
We are currently exploring stablecoins. We will work closely with regulators if and when we decide to move forward.
PayPal is also under scrutiny. The Consumer Financial Protection Bureau (CFPB), is investigating PayPal’s handling of Venmo payments sent to the wrong person accidentally.
Disclaimer: This article is intended for informational purposes only. This article is not intended to be used for legal, tax, investment or financial advice.
