Payment giant PayPal has temporarily halted its plans for a stablecoin, following news that its partner, Paxos, is under investigation by the New York Department of Financial Services. The company was set to launch its stablecoin in the coming weeks, but has now changed its plans.
PayPal’s Push into Crypto
PayPal has been actively entering the cryptocurrency market for the past two years. It allows users to purchase Bitcoin, Ethereum, Bitcoin Cash, and Litecoin through its digital wallet. In January 2022, the company announced its plans to develop its own stablecoin, however, following a series of regulatory actions against crypto companies, it has decided to take a step back.
Investigation of Paxos
The investigation of Paxos, a stablecoin developer that has worked with Binance and Mastercard, is being carried out by the New York Department of Financial Services. The reasons behind the investigation are currently unknown. When asked for comment, a spokesperson for Paxos did not respond, and the Department of Financial Services did not want to say anything about investigations that are still going on.
Regulatory actions against crypto companies have been going up, which is why PayPal has stopped working on a stablecoin. The Securities and Exchange Commission (SEC) just said that Kraken, the third largest cryptocurrency exchange, will have to pay a $30 million fine for selling unregistered securities. In the meantime, Custodia, a Wyoming bank that focuses on cryptocurrency, was not allowed to join the Federal Reserve System.
PayPal CEO to Retire
Dan Schulman, the CEO of PayPal, is planning to retire at the end of 2023. He was in charge of the company’s move into the cryptocurrency market.
PayPal’s plans for a stablecoin have been put on hold for now because regulators are cracking down on crypto companies and its partner, Paxos, is being looked into. The company will work closely with regulators if it decides to move forward with the project in the future.
This story originally appeared on Fortune.com
