In light of the various investigations being conducted by US officials into the crypto industry, PayPal, an American multinational financial technology company, has officially announced that it has decided to halt the development of its stablecoin. The announcement was made via a tweet.
PayPal’s stablecoin became a reality as a result of its partnership with Paxos Trust Company. The New York Department of Financial Services was reportedly investigating the aforementioned blockchain firm. The said stablecoin was supposed to be released next week, but due to ongoing investigations, PayPal has decided to postpone the release.
Crypto Firms Under Investigation
Several companies in the cryptocurrency industry have recently made headlines because they are being investigated by law enforcement. Paxos, a PayPal collaborator on their stablecoin initiative, is one of them. Kraken, a cryptocurrency exchange platform, is also being investigated for the alleged $30 million settlement.
These ongoing investigations are said to have contributed to the closure of all staking services in the United States. Furthermore, the renewed crackdown on centralized cryptocurrency organizations is said to be driving traders and investors to DeFi staking systems for their staking needs.
The collapse of the aforementioned crypto exchange platform has shaken the confidence of the public and the government in the “future of the financial industry” — cryptocurrency. The turbulence in the cryptocurrency industry was deemed to be rooted on the failures in the industry, which have included the collapse of one of the key players in the industry — The FTX.
PayPal’s Current Situation
PayPal is allegedly beginning to walk on eggshells in terms of adapting to new innovations as macroeconomic stability is beginning to weigh on its core business growth, according to a spokesperson for PayPal, Amanda Miller. PayPal is still testing the waters in the stablecoin industry, and if they ever decide to resume their journey, they are opting to partner up with some “relevant regulators.”
The cost of living crisis is putting pressure on consumer spending, particularly discretionary purchases, which have been substantially impacted by growing inflation and other economic issues. Additionally, the Consumer Financial Protection Bureau is looking into PayPal.
The subject of the aforementioned inquiry was how PayPal handles customers who send Venmo payments to the wrong person. Several U.S. senators have put pressure on the CFPB on this problem, including Senator Elizabeth Warren.
