PayPal stops supporting stablecoin development
Due to the continuing investigation by the New York Department of Financial Services into its partner Paxos, PayPal unexpectedly stopped working on its stablecoin project. The stablecoin launch that the payment industry behemoth had scheduled for the foreseeable future has now been postponed.
Regulatory Review Underlying the Movement
Former SEC employee John Reed Stark commented on the matter and said PayPal’s choice was motivated by the rising regulatory scrutiny of cryptocurrency businesses. Any financial institution operating in the US that interacts with a public blockchain is seen to be too hazardous, according to Stark.
Kraken Penalties and Increasing Crypto Interest from PayPal
Stark’s remarks follow recent allegations that Kraken sold unregistered securities, for which the business was fined a whopping $30 million and had its staking feature removed in the US. Despite this, PayPal has exhibited growing interest in the cryptocurrency industry in recent years.
Resurgent Bitcoin and Unregistered Security Issues
Stark recently cited market manipulation as the cause of Bitcoin’s current upswing, despite the claims of some experts that the cryptocurrency’s growth is being driven by macroeconomic fundamentals. The former SEC employee also discussed the possibility of Bitcoin being regarded as an unregistered security in a recent tweet, citing a discussion on Twitter regarding the centralization of Bitcoin mining.