PayPal's putting work on its stablecoin on ice amid increasing regulatory scrutiny, Bloomberg News reported, citing a source.

The news came a day after a report that the New York Department of Financial Services was investigating Paxos, which PayPal had been working with on its stablecoin effort, Bloomberg said, adding that the coin was to have been launched in the coming weeks.

PayPal confirmed early last year that it was working on the stablecoin, which would be backed one-to-one with the U.S. dollar. Paxos holds a virtual currency license that was issued by the New York regulator, which issued stablecoin guidance in June following the Terra collapse and told issuers that stablecoins must be backed by assets that are kept separate from the issuers’ funds.

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