- The increasing intervention of regulatory bodies in the blockchain businesses is said to be the main reason behind discouraging PayPal
- It is true that the crypto industry is trying to recover from a terrible fall and entering into the stablecoin space might not align with PayPal’s long-term role
- It is also possible that PayPal might be planning to integrate state-relevant CBDCs into its multinational payment mechanism
According to the latest reports, PayPal, a multinational payment system, has paused the development of its stablecoins.
As per the reports, the increasing intervention of regulatory bodies in blockchain businesses and the recent investigation on Paxos are said to be the main reasons behind discouraging the fintech giant. It should also be noted that Paxos is a business partner of PayPal and enable the users its users to transfer crypto on and off PayPal’s ecosystem.
PayPal, while declaring their stablecoin, made it clear that they would be working closely with relevant regulators to avoid any unforeseen situations for the project. Taking a step back on their stablecoin development because of increasing regulations goes against their initial intent of providing their users with an alternative to traditional fiat.
Why PayPal is Retreating?
PayPal decided to venture into the stablecoin space in early 2022 after which a series of project collapses shook the industry and pushed it towards a severe crypto winter. The severe Terra-Luna crash created an extreme FUD in the industry and most of the new ventures stopped. It is true that the crypto industry is trying to recover from a terrible fall and entering into the stablecoin space right now might not be the ideal scenario for PayPal.
It is also possible that PayPal might be planning to integrate state-relevant CBDCs into its multinational payment mechanism. This could save it from facing the problems of operating a crypto token within regional regulation. A CBDC-centric process will be much more efficient and beneficial for PayPal and we can see such collaboration in the future.
Also, Read – Everything You Need to Know About Ethereum’s Upcoming ‘Shapella’ Transition