- Fintech giant PayPal has put work on its upcoming stablecoin on hold due to the current regulatory environment in the crypto industry.
- Its stablecoin development partner Paxos is currently under investigation by the New York Department of Financial Services.
American fintech company PayPal has halted work on its future stablecoin as US federal agencies renewed their crackdown on the crypto industry.
Over the past few weeks, several companies in the crypto space have faced enforcement actions, investigations, and audits. PayPal is reportedly considering the changing regulatory landscape before moving forward with its stablecoin.
Stablecoin development partner Paxos faces NYDFS investigation
According to a recent Bloomberg report, PayPal hoped to launch its stablecoin in the coming weeks. However, the plan has been delayed due to the current regulatory environment in the US Paxos, the crypto firm behind the Binance BUSD stablecoin has been working with PayPal on their stablecoin.
Earlier this week, the New York Department of Financial Services opened an investigation into Paxos. The purpose and scope of the investigation have not been disclosed.
Escalating regulatory scrutiny of the crypto industry, combined with an investigation into its partner, has contributed to the fintech giant putting the brakes on its stablecoin venture.
PayPal has reportedly been developing the stablecoin in consultation with relevant regulators. A representative of the firm said that they plan to work closely with regulators to develop a stablecoin.
PayPal is also facing an investigation by the US Consumer Protection Bureau, according to a Bloomberg Law report. The probe revolves around accidental Venmo payments made by customers.
Several US lawmakers, including Sen. Elizabeth Warren, reportedly pressed the bureau on the issue. The new year brought a renewed crackdown on the crypto industry, targeting the likes of Kraken and Paxos, among others.