PayPal is suspending work on its stablecoin as regulators intensify scrutiny of cryptocurrencies and the project’s key partner, Paxos Trust, is under investigation by the New York State Department of Financial Services.
PayPal had hoped to unveil a dollar-pegged stablecoin in the coming weeks, but will delay the event in an attempt to better understand the changing regulatory landscape for such digital assets, Bloomberg writes, citing a source familiar with the situation.
Paxos, the issuer of the Binance Brand Token, which is the third largest stablecoin, is regulated by the government’s Department of Financial Services.
On its website, Paxos emphasizes its commitment to consumer protection, stating that the reserves of both stablecoins it issues are held entirely in cash and US Treasuries.
The company is also issuing its own stablecoin called the Pax Dollar.
Representatives for the issuing company did not respond to a request for comment from Bloomberg.
“When we move forward on this, we will of course work closely with the relevant regulators,” PayPal spokeswoman Amanda Miller said.
Last year, PayPal announced that the Department of Financial Services had granted it a BitLicense (a license that governs virtual currency companies).
PayPal then became the first company to convert the conditional BitLicense to a full one.
Author:
Ekaterina Alipova
Source: RB
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