Fintech giant PayPal has stopped work on its upcoming stablecoin project amid the regulatory scrutiny and crackdown of the crypto sector by United States regulatory bodies.
Reports by Bloomberg indicate that PayPal Holdings has stopped work on its upcoming stablecoin as regulatory bodies in the U.S. increase their scrutiny of the crypto sector. Adding to PayPal’s woes is the probe of Paxos by the New York State Department of Financial Services. According to the news agency Reuters, PayPal was working in collaboration with stablecoin issuer Paxos Trust Company to develop its very own stablecoin.
Bloomberg further reports that PayPal was planning to debut its stablecoin in the coming weeks, but the launch has been delayed due to increased regulatory scrutiny of crypto-related firms since the beginning of the year. U.S. regulators have cracked down on the crypto sector after the failures of many major industry players in 2022. The most recent scrutiny involves the crypto exchange Kraken, which has been taken on by the SEC over its staking program. The exchange agreed to pay $30 million in fines to the SEC and shutter its staking business as part of a settlement with the SEC. PayPal said that should it continue with its stablecoin project, it will work closely with regulators to ensure the project is in full compliance with any regulations set out by U.S. authorities. Amanda Miller, a spokesperson for PayPal, said:
We are exploring a stablecoin. If and when we seek to move forward, we will, of course, work closely with relevant regulators.
PayPal itself is also facing some regulatory scrutiny. The payment processor is the subject of a probe by the Consumer Financial Protection Bureau (CFPB) over the firm’s treatment of customers who accidentally send Venmo payments to the wrong person.
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