Paypal Puts Stablecoin Plans on Hold
• Payment service giant Paypal announced they were exploring the launch of a stablecoin in early 2023.
• However, due to the regulatory scrutiny of the crypto industry, Paypal has put the concept on hold for now.
• This follows recent crackdowns and fines from U.S. regulators on crypto businesses such as FTX, Nexo, and Kraken.
Paypal Explores Stablecoin Development
In January of 2023, payment service giant Paypal said it was exploring the launch of a stablecoin. An executive at Paypal stated that if they were to move forward with this venture, they would work closely with financial regulators.
Regulatory Scrutiny Halts Plans
On Feb 10th however, sources reported that Paypal had put their plans for a stablecoin on hold amid increasing regulatory scrutiny of the crypto industry. The multinational financial technology company was also working with Paxos – an issuer that is reportedly under investigation by the New York State Department of Financial Services (NYDFS).
Recent Regulatory Crackdowns
The regulatory crackdown on cryptocurrency businesses has been significant following the collapse of FTX. Crypto lender Nexo recently agreed to settle with U.S Securities and Exchange Commission(SEC) and state regulators over its earn product and was mandated to pay $45 million in fines while ending its services in the United States. Similarly, Kraken was fined $30 million for its staking service program and was forced to stop offering this service to US retail customers outside US will continue using its services though but founder Jesse Powell is calling for clear regulatory guidance from Congress protect retail investors from using offshore services..
No Comment From NYDFS or Paypal
Nikhilesh De of Coindesk learned about the alleged investigation but was told by an NYDFS spokesperson that they could not comment further due to ongoing investigations. Bloomberg’s Yueqi Yang and Jennifer Surane did not specify why exactly Paypal had decided to pause their plans either .PayPal recently entered into cryptocurrency industry by launching various services but did not comment regarding reason behind putting their plan on hold .