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.
According to Bloomberg, PayPal Holdings has halted the development of its upcoming stablecoin as regulatory bodies in the United States increase their scrutiny of the crypto sector. The investigation of Paxos by the New York State Department of Financial Services is adding to PayPal’s woes. According to Reuters, PayPal was developing its own stablecoin in collaboration with stablecoin issuer Paxos Trust Company.
According to Bloomberg, PayPal had planned to launch its stablecoin in the coming weeks, but the launch has been pushed back due to increased regulatory scrutiny of crypto-related firms since the beginning of the year. Following the failures of many major industry players in 2022, US regulators have cracked down on the crypto sector. The most recent investigation involves the cryptocurrency exchange Kraken, which has been investigated by the SEC for its staking program. As part of a settlement with the SEC, the exchange agreed to pay $30 million in fines and close its staking business. PayPal stated that if it pursues its stablecoin project, It will collaborate closely with regulators to ensure that the project complies fully with any regulations imposed by US authorities. PayPal spokesperson Amanda Miller stated:
We are exploring a stablecoin. If and when we seek to move forward, we will work closely with relevant regulators.
PayPal is also subject to regulatory scrutiny. The Consumer Financial Protection Bureau (CFPB) is investigating the payment processor’s treatment of customers who accidentally send Venmo payments to the wrong person.
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