PayPal is Pausing its Stablecoin Development as its Partner, Paxos, is Under Investigation; Other Scrutinies

Isaiah Richard, Tech Times 10 February 2023, 11:02 pm

If it is not yet known to everybody, there are talks that PayPal is developing its stablecoin to soon launch to the world, with the fintech company now pausing its efforts after several scrutinies rose. One of the most significant reasons behind it is the investigation of Paxos, PayPal's current partner in developing the said cryptocurrency.

Reports are now saying that the company is temporarily hanging back on its creation, but is not a canceled project as per PayPal, with massive plans in the future.

PayPal is Pausing its Stablecoin Development For Now

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(Photo : Getty Image: Justin Sullivan)

Bloomberg reported that PayPal is now taking a pause in its stablecoin development for now, and there are several things it needs to consider along the way, should it push forth with the crypto. One reason for this is the increasing scrutiny by regulators on cryptocurrencies, which is felt throughout the industry due to its volatile nature.

PayPal wants to make its cryptocurrency development emerge on the right track, and it will center on adhering to current requirements and other qualifications needed for the coin.

"If and when we seek to move forward, we will of course, work closely with relevant regulators," said a spokesperson of the company.

Paxos, PayPal's Partner, is Under Investigation

On the other hand, CNET claimed (via Bloomberg) that one reason for its halt in these operations include the ongoing investigations against Paxos by the New York Department of Financial Services.

Paxos is a known partner of PayPal in their ventures towards creating its stablecoin, also a renowned company that provides stablecoins.

According to CoinDesk, the reason behind the Paxos probe is still unclear. The company is best known for debuting Pax, its own stablecoin, and the Binance USD (BUSD).

PayPal's Operations Now

PayPal is a long-running financial tech company in the world, and one of its key features is online payments and virtual transactions that deliver a seamless experience to everyone with an account. One of its most recent moves is to allow cryptocurrency transactions on the platform via the MetaMask wallet, which it only enabled last December.

However, there is a significant concern against the company, especially with the most recent breach that affected as many as 35,000 accounts registered under the platform.

The credential stuffing hack used the usernames and passwords taken from PayPal to access other online accounts and is a hit-or-miss tactic employed by threat actors.

With the growing operations of PayPal and giving its users more opportunities towards the famous digital currencies in the world, there are various concerns regarding its security and operations in the present. Still, its plans to present a new stablecoin to the world are not yet over but would take a time off as of the moment to properly address the different scrutinies it faces.