PayPal temporarily puts stablecoin project on the back burner

The payment giant PayPal was rumored to be working on its own stablecoin, but if we look at the reporting from Bloomberg may believe, then that project is now on pause. The news of PayPal’s stablecoin being paused comes days after it was revealed that its crypto partner Paxos is under investigation by the New York Department of Financial Services (NYDFS).

What is Paxos?

Paxos is an American party that issues stablecoins, among other things. Well-known stablecoins from the company are the Pax dollar and the Binance USD (BUSD). Paxos handles the issuance of the stablecoin of the exchange platform with BUSD on behalf of Binance. In principle, it is a stablecoin from Paxos, to which the Binance brand is stuck.

Earlier this week, news broke that Paxos is under investigation by the NYDFS, potentially affecting the company. There is a chance that it is about the Binance USD, because the US legislator is generally not happy with the way Binance is manifesting itself.

Binance has a relatively opaque structure, which makes it difficult for lawmakers to address them. No one seems to know exactly how Binance’s legal structure works. Now Paxos is in trouble and that seems reason enough for PayPal to put the stablecoin project on the back burner for a while.

Response from PayPal

PayPal responded to Bloomberg through its spokesperson Amanda Miller, who informed the news platform in an email that the project is currently on hold. “If and when we decide to take this further, we will of course work closely with lawmakers,” said Miller. Of course you expect nothing more than that from a company like PayPal.

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A company the size of PayPal can’t afford to just try something in this area. They know better than anyone that the financial sector is not a sandbox in which you can just test things. Products that do not work can cause enormous damage to investors and PayPal obviously does not want to get rid of that problem.

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