PayPal has halted its work on its stablecoin due to partner Paxos being investigated by the New York Department of Financial Services.
The payment provider was expected to release the stablecoin in the near future but has now canceled its plans.
Former U.S. Securities and Exchange Commission official John Reed Stark stated that the regulatory scrutiny of crypto firms is why PayPal has made this decision.
He adds that any US financial company that interacts with public blockchains is viewed as too risky.
Stark’s comments come after Kraken was accused of selling unregistered securities, leading to the company paying a $30m fine and removing its staking feature in the US.
PayPal has had an increased interest in crypto in recent years, but regulatory actions against crypto firms have caused the company to pause its stablecoin development.
PayPal’s CEO Dan Schulman has announced his retirement at the end of 2023.
Stark has been a staunch cryptocurrency critic. He recently attributed market manipulation to Bitcoin’s recent resurgence. However, some suggested that macroeconomic trends were responsible for Bitcoin’s momentum.
The former SEC official also recently tweeted that Bitcoin could be an unregistered security, referencing a Twitter thread about Bitcoin mining centralization.
