PayPal Holdings Inc. regulatory bodies cryptocurrencies It is halting its work on stablecoins as it increases its scrutiny on stablecoins and a key partner of the project is under investigation by the New York State Department of Financial Services.
PayPal Stops Stablecoin Research Until Regulators Understand Cryptocurrency Work
PayPal was hoping to launch the stablecoin, which will be backed one-on-one by the US dollar, in the coming weeks, but will delay that work as it tries to understand the changing regulatory environment for such digital assets, according to a person familiar with the matter.
New York regulators are investigating Paxos Trust Co, a cryptocurrency firm with which PayPal is collaborating on the stablecoin effort, Bloomberg News reported this week.
“We are researching a stablecoin,” PayPal spokesperson Amanda Miller said in an emailed statement, adding: “If and when we want to move forward, we will of course work closely with the relevant regulators.”
Stablecoins are intended to maintain a certain value, and some are backed by an appropriate equivalent of assets such as cash and bonds. It was first reported last year that San Jose, California-based PayPal is exploring launching its own stablecoin as part of its cryptocurrency move.
The company announced last year that the Department of Financial Services has granted the firm a “BitLicense” that manages businesses working with virtual currencies. PayPal said at the time that it was the first company to convert a conditional BitLicense to a full BitLicense.
*Not investment advice.
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