Report: Paypal Puts Stablecoin Plans on Hold as US Regulators Crack Down on Crypto Industry
During the first week of 2023, payment service giant Paypal said it was exploring the launch of a stablecoin. At the time, an executive at Paypal stated that if the company moved forward, it would work closely with financial regulators. However, on Feb. 10, a source noted that Paypal has put the concept on hold for now amid the regulatory scrutiny of the crypto industry. Paypal Pauses Stablecoin Development as Regulatory Concerns Loom
On Jan. 7, 2023, it was reported that Paypal was exploring the creation of a stablecoin.“We are exploring a stablecoin,” a Paypal executive told reporters at the time. “If and when we seek to move forward, we will, of course, work closely with relevant regulators.” The multinational financial technology company, founded in Dec. 1998, is one of the largest online payment systems in the world.
However, Paypal appears to have slowed its plans to develop a stablecoin, according to a Bloomberg report citing a person with knowledge of the matter. Paypal was also working with Paxos, the stablecoin issuer that is reportedly under investigation by the New York State Department of Financial Services (NYDFS). Nikhilesh De of Coindesk learned about the alleged investigation, but was told by an NYDFS spokesperson that the agency could not comment on ongoing investigations.
Paxos manages two stablecoin projects, a tokenized gold coin, and holds a Bitlicense issued by the NYDFS. There has been a significant crackdown on cryptocurrency businesses following the collapse of FTX. Recently, crypto lender Nexo agreed to settle with the U.S. Securities and Exchange Commission (SEC) and several state regulators over its earn product. Nexo paid the regulators $45 million on a “no admit, no deny” basis and ended the program in the United States.
More recently, Kraken was fined $30 million for its staking service program and was forced to stop offering the service to U.S. retail customers. Kraken clarified that it will continue its staking services for customers outside the United States. Founder Jesse Powell is calling on Congress to issue clear regulatory guidance and protect retail investors from using offshore services.
Bloomberg’s Yueqi Yang and Jennifer Surane did not reveal the specific reason for Paypal’s decision to pause its stablecoin plans. The payments giant recently entered the cryptocurrency industry by launching a wide range of crypto services in 2021. Paypal holds an NYDFS-issued Bitlicense and converted its conditional Bitlicense to a full license in June 2022. Tags in this story BitLicense, Congress, crypto industry, Crypto lender, crypto services, Decision, earn product, Financial Technology, Investigation, Kraken, New York State Department of Financial Services (NYDFS), Nexo, offshore services, online payment system, pause, pause stablecoin, pausing plans, Paxos, Paxos stablecoins, Payments Giant, Paypal, PayPal stablecoin, PayPal stablecoin idea, Plans, regulatory guidance, regulatory scrutiny, relevant regulators, retail investors, Spokesperson, Stablecoin, Stablecoin issuer, staking service program, state regulators, U.S. retail customers, U.S. Securities and Exchange Commission (SEC), US Regulators
What do you think about Paypal’s decision to pause their stablecoin plans? Share your thoughts in the comments section below. Jamie Redman
Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today. Ordinal Inscriptions Take the NFT World by Storm: Over 50,000 Added to the Bitcoin Blockchain in 2023 NEWS | 6 hours ago Bankrupt Celsius Aims to Raise $14.4 Million From Bitcoin Mining Rig Credits and Coupons NEWS | 12 hours ago
Image Credits: Shutterstock, Pixabay, Wiki Commons, Editorial photo credit: JHVEPhoto / Shutterstock.com Previous articleBit2Me Debit Card Launch Gives Users up to 9% Cashback on All Purchases Next articleStiffing the Staker: The SEC’s Latest Crackdown on Crypto Innovation Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItNFT Sales Volume Saw a Small Uptick This Week — Moonbirds, Mutant Apes Take Top Sales
Non-fungible token (NFT) sales saw a small uptick over the last week as $658.4 million in NFT sales were recorded, up 3.35% in seven days. Out of 15 blockchains, Polygon-based NFT sales saw the largest increase in volume, jumping 106.68% ... read more.Fidelity Investments Launches Crypto, Metaverse ETFs — Says "We Continue to See Demand" Argentinian Securities Regulator Launches Innovation Hub to Discuss Regulated Crypto Investments Fed"s Bullard Wants to Raise Bank Rate to 3.5% by Year"s End, Hints at 75 Basis Point Rate Hike Iran to Increase Penalties for Unauthorized Cryptocurrency Mining