Paypal has stopped working on its upcoming stablecoin due to the recent crackdown on crypto by U.S. regulators.
The fintech giant had partnered with Paxos for its stablecoin.
Paxos is facing a probe by the New York Department of Financial Services.
Crypto exchange Kraken was the most recent subject of the increased regulatory scrutiny.
Fintech giant PayPal has reportedly paused the development of its stablecoin due to the recent crackdown on the crypto industry by U.S. regulators. The stablecoin was being developed in partnership with Paxos Trust Company, a blockchain firm that is currently facing a probe by the New York Department of Financial Services.
PayPal to work closely with regulators for its stablecoin
According to a report by Bloomberg, PayPal was planning to debut its new stablecoin in the coming weeks. However, a person familiar with the matter revealed that the plans to launch the stablecoin were delayed due to the increased regulatory scrutiny of crypto firms since the beginning of this year.
This includes the probe into Paxos by the NYDFS and the controversial $30 million settlement with crypto exchange Kraken that involved shutting down all staking services in the United States. The renewed crackdown on centralized crypto firms has led to traders and investors lining up at DeFi staking protocols for their staking needs.
We are exploring a stablecoin. If and when we seek to move forward, we will, of course, work closely with relevant regulators.”
Amanda Miller, spokeswoman for PayPal.
PayPal itself is facing a probe by the Consumer Financial Protection Bureau (CFPB). The probe is reportedly related to the fintech firm’s treatment of customers who accidentally send Venmo payments to the wrong person. The CFPB has been facing pressure from several U.S. lawmakers, including Senator Elizabeth Warren, over this matter.