Paypal Pauses Stablecoin Plans as US Crypto Regulation Intensifies

• Paypal announced that it was exploring the launch of a stablecoin in early 2023.
• However, the company has since put their plans on hold due to increased regulatory scrutiny of the crypto industry.
• This follows recent fines and investigations issued against other cryptocurrency businesses by US regulators.

Paypal Explores Stablecoin Launch in Early 2023

Payment service giant Paypal announced in Jan. 2023 that it was exploring the launch of a stablecoin, with an executive stating that they would work closely with financial regulators should they move forward.

Regulatory Scrutiny Increases, Paypal Puts Plans On Hold

However, on Feb. 10, a source noted that Paypal has put these plans on hold for now amid increasing regulatory scrutiny of the crypto industry. This follows recent fines and investigations issued against other cryptocurrency businesses by US regulators such as FTX, Nexo and Kraken. The latter two were fined $45 million and $30 million respectively due to their earn product and staking services programs respectively. Founder Jesse Powell is calling on Congress to issue clear regulatory guidance to protect retail investors from using offshore services. The specific reason for Paypal’s decision to pause its stablecoin plans remains unclear.

Paypal Enters Cryptocurrency Industry

Despite putting their stablecoin plans on hold, Paypal has still made strides into the cryptocurrency industry by launching a range of crypto services including allowing customers to buy, sell and hodl cryptocurrencies directly from its app or website. They have also partnered with Paxos as part of their exploration into stablecoins; however this is reportedly being investigated by New York State Department of Financial Services (NYDFS).

Regulators Crack Down On Crypto Businesses

The U.S Securities and Exchange Commission (SEC) have been cracking down on crypto businesses recently due to them not following regulations correctly; for example Nexo agreed to settle with several state regulators over its earn product and paid out $45 million as well as ending the program in the United States altogether. Due to this increase in regulation many companies are now looking into how they can ensure compliance before offering any new services or products within the industry.

Conclusion

    Although originally planning to launch a stablecoin, Paypal appears to have put these plans on hold for now due to increased regulatory scrutiny from authorities such as SEC who have been taking action against companies not complying with regulations correctly; such as fining Nexo $45 million over its earn product program and Kraken $30 million over its staking service program which forced them both stop offering certain services within USA retail customers . Despite this setback however ,Paypal has still managed make progress within crypto space overall through launching multiple crypto related services thus far .