- According to reports, efforts to launch PayPal’s (PYPL) own stablecoin have been temporarily suspended.
- The online payment service provider postponed its plans as a result of heightened regulatory oversight of cryptocurrencies.
According to a Bloomberg report, PayPal’s ambitions to create its own stablecoin have been put on hold. The launch of PayPal’s new stablecoin was scheduled for the upcoming weeks.
As per a source with knowledge of the situation, the decision to postpone the stablecoin debut was made because regulatory oversight of cryptocurrency companies has intensified since the year’s beginning.
“We’re looking into stablecoins, “a PayPal representative stated. “Naturally, we will cooperate extensively with the appropriate regulators if and when we decide to proceed.“
The payment company’s statement comes after Paxos, a stablecoin developer that has earlier collaborated with Binance and Mastercard, was revealed to be under investigation by the New York Department of Financial Services, a specialised subsidiary of the state government that is a big name among US cryptocurrency regulatory bodies.
PayPal and Paxos announced in August of last year that they were creating cryptocurrency solutions. Since 2020, the two have collaborated to integrate cryptocurrency with PayPal.
PayPal remained upbeat about the launch of its stablecoin initiative, which was planned to be pegged 1:1 to the US dollar. Even before the work was delayed, the project was expected to come in the upcoming weeks.
After learning of the investigation, PayPal says it halted further development to better comprehend the evolving regulatory situation for such digital assets.
This includes the NYDFS investigation into Paxos and the contentious $30 million settlement with cryptocurrency exchange Kraken, which called for the termination of all staking services in the US. Traders and investors are lining up at DeFi staking methods to meet their staking needs as a result of the renewed assault on centralized cryptocurrency corporations.
The Consumer Financial Protection Bureau is also investigating PayPal (CFPB). The investigation is said to be associated with the fintech company’s approach to customers who unintentionally sent Venmo payouts to the wrong person.
In the past two years, PayPal has made a concentrated effort to enter the cryptocurrency market by enabling users to purchase Bitcoin, Ethereum, Bitcoin Cash, and Litecoin through its digital wallet.