PayPal has temporarily suspended its efforts in creating stablecoins due to heightened regulatory oversight of cryptocurrencies, as reported by Bloomberg News. This decision follows the investigation by the New York State Department of Financial Services of one of PayPal’s key partners on the project.
PayPal aimed to launch its stablecoin, which will be fully supported by the US dollar on a 1:1 basis, in the near future, according to a source with inside information cited by Bloomberg.
“We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators,”
A representative for the payment company stated in an email.
The crypto market is currently experiencing instability as the downfall of major players such as FTX has caused investors to lose confidence in what was previously viewed as a promising development in the financial sector.
A series of high-profile failures has led to intensified global regulatory oversight of companies involved in the cryptocurrency sector.
Additionally, the macroeconomic downturn has started to impact PayPal’s main operations, causing a decline in growth as consumer spending, particularly on non-essential items, is being impacted by the cost-of-living crisis caused by inflation that has reached record levels.
