PayPal Suspends Its Upcoming Launch Of Stablecoin Amid Paxos Investigation
- Bloomberg claimed that PayPal had halted work on its stablecoin due to increased regulatory scrutiny.
- The news came a day after a report that the New York Department of Financial Services was investigating Paxos.
According to Bloomberg, PayPal has halted its stablecoin development because of regulatory worries in the industry. Following the announcement of the Paxos probe yesterday, the payment platform has halted the development of its own stablecoin.
The announcement came a day after Bloomberg reported that the New York Department of Financial Services was examining Paxos, with whom PayPal has been collaborating on its stablecoin project, and that the coin was set to launch in the following weeks.
PayPal remained upbeat about the launch of its stablecoin initiative. Furthermore, Bloomberg reports that the project was supposed to be completed in the next weeks before it was halted today.
The firm announced early last year that it was developing a stablecoin that would be backed one-to-one by the US dollar. Paxos has a virtual currency license from the New York regulator, which provided stablecoin guidance in June following the Terra collapse, telling issuers that stablecoins must be backed by assets kept separate from the issuers’ finances.
The stablecoin issuer was a crucial collaborator in the PayPal initiative, and the New York State Department of Financial Services has officially opened an investigation. PayPal has suspended development following the revelation of the investigation in order to better “understand the shifting regulatory landscape for such digital assets, according to the article.
Following the story, Amanda Miller, a spokesman for PayPal, emailed a comment. “We are researching a stablecoin, and if and when we wish to move forward, we will, of course, cooperate closely with relevant regulators,” the company said.
The creation of a PayPal stablecoin began last year as part of the payment companies’ commitment to the digital asset business. Furthermore, the Department of Financial Services awarded PayPal a “BItcLicense” last year. Making it the first corporation to “transform a conditional BitLicense into a full one.”
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