Based on reports from various news outlets, PayPal has apparently decided to abort the launch of its stablecoin that was expected to be unveiled in the upcoming weeks, despite releasing its 2022 fourth quarter ffinancial results on Thursday.
Back in August 2022, PayPal and the stablecoin issuer Paxos Trust stated that they were developing cryptocurrency products.
Since 2020, the New York-based Paxos has maintained a cryptocurrency agreement with PayPal, although it has had troubles with the New York Department of Financial Services.
Regulators Go After PayPal Crypto Partner, Paxos
According to reports, the NYDFS is scrutinizing Paxos, although the breadth of the inquiry has not been fully disclosed in detail.
As this developed, the US Office of the Comptroller of the Currency continues to set its sights on safeguarding consumers from potential crypto market-related hazards.
The OCC is reportedly in constant contact with regulated firms to understand the weaknesses and liabilities consumers may face because of the volatility of the cryptocurrency market.
Paxos’ stablecoins include the Pax dollar (USDP) and Binance USD (BUSD), a stablecoin supplied through a white-label enterprise with the Binance trademark.
Paxos emphasizes its dedication to consumer protection on its website and states that assets for both of the stablecoins it generates are entirely stored in cash and U.S. Treasuries.
In an emailed statement, a PayPal representative said:
“We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators.”
The Popularity And Use Cases Of Stablecoins
Stablecoins are digital currencies developed to keep a consistent value relative to another asset, often a fiat currency such as the dollar or euro.
In recent years, they have grown in popularity due to their ability to combine the benefits of cryptocurrencies, such as swift and inexpensive cross-border transactions, with the stability of traditional fiat currencies.
This makes them an appealing alternative to volatile cryptocurrencies such as Bitcoin and Ethereum.
In the fast expanding world of cryptocurrencies, the rising popularity of stablecoins has been driven by the demand for a more stable and dependable method of transaction.
Meanwhile, the recent failure of several of the cryptocurrency market’s top participants, particularly FTX, has eroded investor trust in what was once considered the next big thing in finance.
A halt in the creation of PayPal’s stablecoin follows a slew of recent regulatory actions against crypto businesses. According to an unidentified source who spoke with Bloomberg, the action forced the payments company to cease its pursuit of its own coin.
In the past two years, PayPal has made a serious foray into cryptocurrency, enabling users to purchase Bitcoin, Ethereum, Bitcoin Cash, and Litecoin using its digital wallet.
In January last year, PayPal announced its intention to study the creation of its own stablecoin. This was long before crypto giants such as Celsius, Voyager, and most notoriously FTX went insolvent and crumbled in the following months.
-Featured image from Small Business Trends
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