PayPal Holdings Inc is pausing work on its stablecoin as regulators increase scrutiny of cryptocurrencies and a key partner on the project faces a probe by the New York State Department of Financial Services, Bloomberg News reported on Friday.

PayPal had hoped to debut the stablecoin, which will be backed one for one by the dollar, in the coming weeks, Bloomberg reported, citing a person with knowledge of the matter.

“We are exploring a stablecoin; if and when we seek to move forward, we will of course, work closely with relevant regulators,” a spokesperson for the payments firm said in an emailed statement.

The cryptocurrency market is going through a turbulent period as the collapse of some of its biggest players, including FTX, has shaken the faith of investors in what was seen as the next big thing in the world of finance.

A string of high-profile bankruptcies has sparked tough global regulatory scrutiny of firms operating in the crypto industry.

The macroeconomic weakness has also begun to pressure growth at PayPal’s core business as consumer spending, particularly discretionary purchases, comes under pressure due to a cost-of-living crisis, triggered by decades-high inflation.

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