According to its annual report, leading financial institution, PayPal revealed that it held $604 million worth of crypto assets on behalf of its customers as of December 31, 2022.
The report revealed that the company holds $291 million in bitcoin and $250 million in ethereum. Another $63 million is held in other digital assets, such as bitcoin cash and litecoin, though the firm did not provide a breakdown for either. PayPal said that a third-party custodial service provider holds digital assets in its name to benefit its customers.
regulatory risk
PayPal highlighted the uncertain regulatory environment as a risk to its business. The company said that the regulatory status of some cryptos under current law is unclear. It added that the rapidly evolving regulatory landscape may require the firm to obtain additional licenses.
The multinational financial technology firm noted that its “current and planned customer cryptocurrency offerings may subject us to additional regulations, licensing requirements or other obligations.”
The lack of regulatory clarity in the US is a growing concern for crypto companies operating in the country, with stakeholders in the industry seeking regulatory guidance. The US Securities and Exchange Commission (SEC) recently took enforcement action against Kraken for its staking product. The development resulted in a $30 million fine for the crypto exchange.
PayPal suspends stablecoin project
According to a report in Bloomberg, PayPal has stopped work on its stablecoin. It cited regulatory scrutiny of the crypto industry and the recent investigation into its partner Paxos.
Paxos is currently under investigation by the New York Department of Financial Services (NYDFS). However, the company has denied claims that another regulator asked it to withdraw its application for a banking charter.
PayPal originally planned to launch its dollar-pegged stablecoin in a few weeks, but a spokesperson for the company confirmed that it is actively exploring the cryptocurrency and plans to resume work on the project. But will work with the regulators.
Stable coins have come under scrutiny from financial regulators following the collapse of Terra’s algorithmic stablecoin. Financial regulators around the world expressed concern about their potential impact on the wider financial economy.
disclaimer
BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.