Patrick

PayPal USD

According to a regulatory filing, the payments giant received a subpoena from the SEC's Division of Enforcement, requesting documents related to its PayPal USD stablecoin. 
The global payments company, which introduced its own stablecoin in partnership with Paxos Trust Company in August, said it is cooperating with the SEC. This subpoena follows an earlier instance this year when the SEC's enforcement staff issued a letter to <a href="https://financefeeds.com/paxos-burns-700-million-worth-of-busd-binance-assures-users/">Paxos</a>, alleging that a stablecoin it previously issued was an unregistered security. Subsequently, New York regulators directed Paxos to halt issuing that token. 
"On November 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request," PayPal revealed in its quarterly earnings report. 
PayPal’s foray into the stablecoin market represented the first such venture by a major financial service firm. This move, however, has raised concerns among U.S. regulators, echoing worries similar to those seen during the launch of Facebook's Libra stablecoin project. The primary concern revolves around the potential rapid expansion and widespread use of a token tied to a major tech platform, posing risks to U.S. financial stability. 
In Congress, the arrival of <a href="https://financefeeds.com/crypto-com-joins-forces-with-paypal-and-paxos-for-enhanced-pyusd-exchange-experience/">PayPal's stablecoin</a> has further polarized the ongoing debate over crypto legislation. Figures like Rep. Maxine Waters (D-Calif.) criticized PayPal’s recent entry into the dollar-pegged stablecoin market, arguing that the company should have awaited federal regulatory approval before launching its stablecoin. 
As the top Democrat on the House Financial Services Committee (HFSC), Waters expressed concerns over&nbsp;<a href="https://financefeeds.com/paypal-enables-checkout-crypto-feature-merchants/">PayPal’s</a>&nbsp;decision to introduce a stablecoin, saying that there is currently no established federal framework for regulating such assets. 
Waters’ stance is in line with ongoing efforts in Congress to address the regulatory gaps surrounding stablecoins. The Republican-led House Financial Services Committee has advanced a stablecoin bill, with Chairman Patrick McHenry (R-NC) saying that PayPal’s entry into the stablecoin market underlines the need for lawmakers to expedite regulatory measures for these digital assets. 
<a href="https://financefeeds.com/vantage-adds-paypal-and-wins-best-apac-region-broker-at-advfn-awards/">PayPal</a>&nbsp;says the primary purpose of its cryptocurrency is to facilitate payments in digital environments, particularly in the emerging Web3 landscape. Th token, which can be bought or sold on PayPal’s app or website at $1.00 per PYUSD, aims to enable direct flows to developers and enhance the user experience for online payments. 
The stablecoin is fully backed by liquid assets like U.S. dollar deposits, short-term U.S. Treasurys, and cash equivalents, ensuring stability and redeemability at a 1-to-1 ratio with U.S. dollars.

PayPal subpoenaed by SEC over dollar-pegged cryptocurrency

FinanceFeeds

Other articles published on Nov 2, 2023

Citadel, Fidelity-backed EDX Markets delists Bitcoin Cash

Why Will Solana Crash Despite Recent Rally?

ADGM Expands Business Jurisdiction To Include Al Reem Island

Ripple Provides Major Update on XRP Case v. SEC, Binance Delists SHIB, LUNA, ADA Trading Pairs; I...

Meet Zeebu Advisor: Hosam Akkad, Steering Zeebu Towards a Future of Disruptive Financial Solutions

Veteran Box in Pokemon GO Ignite Disappointment Among Players

Join our free newsletter for daily crypto updates!