The news that PayPal has decided to ditch its plan for a stablecoin cryptocurrency has sent shockwaves throughout the financial world. This decision has been met with mixed reactions from those in the industry.This industry includes one prominent former Securities and Exchange Commission (SEC) official.
The SEC was established to protect investors, maintain fair, orderly, and efficient markets.Adding facilitated capital formation; this makes it an important factor in the discussion of PayPal’s move away from stablecoins.
The former SEC official, who wishes to remain anonymous, described the decision as “unfortunate” but understandable given the recent regulatory scrutiny surrounding cryptocurrencies.
The former SEC official went on to explain that while the underlying technology of stablecoins can be beneficial and potentially revolutionary in terms of how money is transferred, their current structure is not always compatible with existing regulations and laws. They suggested that instead of trying to impose existing rules on cryptocurrencies, regulators should work with innovators in the space to develop
PayPal, a payment provider, had been expected to launch its own stablecoin in the near future, but has now decided to abandon these plans. This unexpected change in direction has been attributed by former U.S. Securities and Exchange Commission official John Reed Stark to the increasingly stringent regulatory environment in which crypto firms are now operating. He explains that any US financial company that seeks to interact with public blockchains is now viewed as too risky by regulators, thus making it impossible for PayPal to continue with their plans without violating various laws and regulations. The news of the decision has come as a disappointment to many who had been eagerly anticipating the launch of the stablecoin by PayPal.
In recent years, PayPal has become increasingly interested in the cryptocurrency space.However, its plans to develop a stablecoin have been put on hold due to regulatory actions against crypto firms.
CEO Dan Schulman has announced his retirement at the end of 2023 and he has been a vocal critic of cryptocurrencies. He recently suggested that market manipulation was behind Bitcoin’s resurgence.Yet other experts argued that macroeconomic trends were responsible for the digital currency’s momentum..
