According to PayPal’s annual report, the company held $604 million in crypto assets on behalf of its customers as of December 31, 2022.
According to Wallex and quoted by Bein Crypto, this report showed that the customers of this payment giant have 291 million dollars of Bitcoin and 250 million dollars of Ethereum on this platform. Another 63 million belongs to other digital assets such as Bitcoin Cash and Litecoin. PayPal uses a third-party digital custody service provider to secure its customers’ digital assets.
The company also cited legal uncertainty surrounding cryptocurrencies as a risk to its business. The company stated that the legal and regulatory status of some digital currencies is unclear according to the current law. Also, this company mentioned the possibility of needing to obtain more licenses if the legal landscape changes.
This multinational company noted:
Our current and future cryptocurrency-related products may subject us to additional regulatory, licensing and other obligations.
The lack of clear and transparent laws in the United States of America has created growing concerns for businesses operating in this area. Many of the stakeholders and activists of this industry are calling for more regulations and regulatory guidelines. In one of the recent examples, the US Securities and Exchange Commission (SEC) has sentenced Kraken cryptocurrency exchange to pay a 30 million dollar fine for providing its users with the “digital currency stick” product.
According to Bloomberg, PayPal has suspended work on its stablecoin project. The reason for this is the increase in legal uncertainty in the crypto field and the recent investigations by financial institutions on PayPal’s business partner – Paxos.
The Pexos case is currently being investigated by the New York Department of Financial Services (NYDFS). Pexos has a limited banking license from the US Office of the Comptroller of the Currency (OCC).
PayPal previously planned to release its dollar-based stablecoin in the near future. PayPal will actively monitor the crypto industry and cooperate with regulators once it resumes work on its stablecoin, according to a company spokesperson.
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