Reportedly the top American regulator took legal action against giant global digital wallet service provider PayPal for its crypto business.
PayPal is a popular financial technology company that provides an online payment system in the majority of countries that support online money transfers. PayPal’s wallet-to-wallet money transaction at zero fee makes it a more convenient way of payment service among Americans.
On 2 Nov 2023, Reuters reported that PayPal received a subpoena from the Securities and Exchange Commission (SEC) in connection with the company’s stablecoin called PayPal US dollar Stablecoin (PYUSD).
Payments firm PayPal said it had received a subpoena from the Securities and Exchange Commission tied to its US dollar stablecoin https://t.co/gKUELUooPP pic.twitter.com/VG4pH0jXxx
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— Reuters Legal (@ReutersLegal) November 2, 2023
Here the whole matter is not fully transparent but it is confirmed that the SEC body is not happy with PayPal’s stablecoin business despite PayPal’s assurance to keep stablecoin always backed by 100% reserves in U.S. dollar deposits, U.S. Treasuries, and similar cash equivalents, with the help of regulated stablecoin firm Paxos Trust.
In the present time, PayPal’s situation is not good enough in the crypto-related business.
Recently PayPal was forced by the United Kingdom’s Financial Conduct Authority (FCA) to prohibit crypto services for new customers.
However, this is a struggling phase for PayPal’s crypto business but still, this news failed to bring any negative impact on the company’s stock price.
PayPal CEO Alex Chriss confirmed that the company will always remain focused on expanding its crypto business activities despite challenges.
Following PayPal CEO’s statement, the trade price of PayPal stock surged nearly 6% on 2 Nov 2023.
Libra stablecoin
Following this bitter news regarding PayPal Stablecoin, some people said that PayPal will probably be forced by the American financial regulators to suspend stablecoin just like Meta (formerly Facebook) was forced to wind down Libra stablecoin, a US dollar-pegged stablecoin, business.
It’s been nearly 5 years and the situation is different for the financial services-focused companies to deal with digital currencies, so such kind of assumption should be ignored.
Read also: Real Dog behind Dogecoin (Doge) completes 18 years, will Elon Musk talk about it?
SEC takes action against PayPal for its Ethereum-powered stablecoin
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