Stablecoin Project Paused by PayPal Due to Paxos Investigation

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Last Updated on February 11, 2023 by Bitfinsider

According to a source, PayPal has suspended work on its stablecoin due to growing regulatory scrutiny.

The stablecoin was supposed to have been released in the following weeks. The announcement came a day after it was reported that the New York Department of Financial Services was looking into Paxos, who PayPal had been collaborating with on its stablecoin initiative.

“We are exploring a stablecoin,” a PayPal representative stated. “If and when we seek to move forward, we will of course, work closely with relevant regulators,” the representative added.

Early last year, PayPal made it known that it was developing a stablecoin that would be pegged 1:1 to the dollar. In June, in the wake of the Terra collapse, the New York regulator released stablecoin guidance and informed issuers that stablecoins needed to be backed by assets that were maintained apart from the issuers’ finances. This authority also granted Paxos a virtual currency license.

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