PayPal puts its stablecoin project on hold

Payments giant PayPal has paused work on a potential upcoming stablecoin, Bloomberg News reported on Feb. 10.

A representative of the company told Bloomberg:

“We are exploring a stablecoin…If and when we seek to move forward, we will, of course, work closely with relevant regulators.”

Though PayPal never officially announced that project, code for a USD-backed “PayPal Coin” was discovered in the company’s application code more than a year ago. That code was shared with Bloomberg, who first reported the development in January 2022.

PayPal hopes to introduce the stablecoin in the coming weeks, according to Bloomberg — although no launch timeline has been officially announced.

Bloomberg implied that regulatory difficulties might be behind the delay. Stablecoin issuer and brokerage Paxos, which provides PayPal’s crypto features, was supposedly working on the asset. However, rumors have emerged that Paxos faces a probe from the New York Department of Financial Services (NYDFS). This may have shifted the firm’s focus.

New restrictions on staking and interest-bearing services — though not necessarily a feature of PayPal’s stablecoin — may also be encouraging caution.

Despite delays on its stablecoin, PayPal has introduced various crypto features. In October 2020, it began to allow users to invest in Bitcoin, Ethereum, and other coins solely through its own platform. The company expanded trading capabilities and raised limits, and starting in mid-2022, PayPal users in the U.S. could transact crypto with other wallets.

Meanwhile, recent reports indicate PayPal holds $604 million worth of customer crypto, including $291 million in Bitcoin and $250 million in Ethereum.