PayPal pauses stablecoin project; IMF warns El Salvador about using Bitcoin; Brazilian bank allows tax payment with crypto.
Payments giant PayPal paused stablecoin work due to pressure from regulators.PayPal’s pause on its stablecoin project comes after the New York Department of Financial Services began investigating Paxos. The company was planning to launch its stablecoin next week.
PayPal was working with cryptocurrency firm Paxos Trust on the stablecoin project. Paxos, the company behind Binance’s stablecoin, says it attaches great importance to consumer protection and that both stablecoins are fully backed by cash reserves. The company also has a stablecoin called Pax Dollar.
PayPal spokesperson Amanda Millet told Bloomberg:
“We are researching for a stablecoin. If and when we want to move forward, we will be in close contact with regulators”
PayPal announced earlier last year that it is working on a USD-indexed stablecoin. PayPal announced today that it has $604 million in cryptocurrencies. Bitcoin and Ether make up the largest portion of these assets. However, the company’s portfolio also includes LTC and Bitcoin Cash.
According to the company’s filing, the total amount of financial assets is over $25 billion. PayPal did not include cryptocurrencies in its reports in previous years.
IMF warns El Salvador about using Bitcoin
After its recent visit to El Salvador, the IMF advised the country to reconsider its Bitcoin plans. The organization told El Salvador that it should be more careful due to the speculative nature of Bitcoin.
In a statement made by the International Monetary Fund (IMF), he said that El Salvador currently uses Bitcoin in a limited way, and therefore all risks are not fully realized. The IMF said El Salvador should assess all risks by addressing the country’s financial integrity, fiscal sustainability and consumer protection.
The IMF noted the importance of recognizing that these risks may escalate in the future, given that the country has accepted BTC as a legal tender since September 2021.
The need for greater transparency regarding the government of El Salvador’s Bitcoin transactions and the financial situation of the state-owned Bitcoin wallet Chivo wallet was also highlighted.
The government of El Salvador said that Bitcoin bonds will mean government debt and use it to finance the construction of Bitcoin City. El Salvador’s Bitcoin City is part of their plan to continue attracting crypto investors.
Brazilian bank allows tax payment with crypto
With the new decision, it will pave the way for Brazilian taxpayers to be included in the digital asset ecosystem, while also allowing them to fulfill their tax obligations.
Banco do Brasil, one of Brazil’s largest banks, is offering taxpayers a convenient new option to pay using cryptocurrencies.
According to a statement released by Brazilian bank Banco do Brasil on February 11, the bank allows taxes to be paid in crypto as part of a partnership with Brazil-based crypto company Bitfy.
Bitfy, which will be the “collection partner” for the bank, will pave the way for users to pay taxes with crypto. Bitfy CEO Lucas Schoch said that “the new digital economy is a catalyst for a future full of advantages.”
The move came when Rio de Janeiro in Brazil paved the way for paying taxes using cryptocurrencies in October 2022. Brazil adopted a regulatory framework legalizing the use of cryptocurrencies as a payment method within the country in December 2022. The law will likely take effect next June.
Brazil announced in May 2022 that users would be taxed for Bitcoin transfer transactions. However, this does not apply to all investors. Users trading less than 35,000 reals (about $7,000) in crypto are exempt from tax.