Just three months after PayPal entered the fray to bring stablecoins to the masses, it’s attracting attention from U.S. regulators.
The payments giant said Thursday that it had received a subpoena from the Securities and Exchange Commission related to its U.S. dollar-pegged stablecoin, according to Reuters. TechCrunch has reached out to PayPal for comment.
In early August, PayPal launched PYUSD, a stablecoin issued by Paxos Trust Company and backed by U.S. dollar deposits. At the time, the firm said the digital currency solution would be “gradually” rolling out to users in the U.S. In September, PayPal made the stablecoin available on Venmo.
PayPal joins a growing list of tech companies targeted by U.S. authorities over their interaction with digital currencies. While most of the players under regulatory scrutiny are crypto-native, PayPal marked the first major U.S. financial institution to launch stablecoins for payments and transfers.
The move will likely raise concerns within the stablecoin space in the U.S. Meanwhile on other continents, entrepreneurs and regulations are propelling the development of stablecoins, which are regarded as the more useful form of cryptocurrency for the exchange of value than most volatile tokens. Hong Kong, for instance, is working to launch a regulatory framework for stablecoins by 2024. The European Union similarly has established guardrails for stablecoin use, with companies like Monerium offering regulated euro-denominated tokens.
This is a developing story…