SEC Drops Investigation into PayPal’s Stablecoin, PYUSD

[Hypedyor]

PayPal’s stablecoin, PayPal USD (PYUSD), is no longer under investigation by the U.S. Securities and Exchange Commission (SEC). In an April 29 regulatory filing, PayPal confirmed that the SEC had concluded its inquiry into the stablecoin without taking any enforcement action.

The investigation began in November 2023 when the SEC’s Division of Enforcement issued a subpoena requesting documents related to PYUSD. At that time, PayPal cooperated with the SEC’s request for information. However, in February 2024, the SEC notified PayPal that it was closing the inquiry, citing that no further action would be taken.

PayPal has emphasized that PYUSD is fully backed by U.S. dollars, including short-term treasuries and cash equivalents, and is redeemable on a 1:1 basis for U.S. dollars. Despite these assurances, PYUSD has faced significant competition in the crowded stablecoin market, dominated by Tether (USDT) and Circle’s USD Coin (USDC). As of the latest data, PYUSD has a market capitalization of just $880 million, a fraction of Tether's $148.5 billion.

However, PYUSD has seen some positive growth this year. Its circulating supply has increased by 75% since the beginning of 2025, according to CoinGecko, though it remains 14% below its peak supply of over $1 billion in August 2024.

In addition to growth, PayPal has introduced a rewards program for PYUSD holders, offering a 3.7% annual yield for U.S. users. PayPal also announced a partnership with Coinbase on April 24, aiming to expand PYUSD’s adoption and use cases. This collaboration could help bolster the stablecoin’s growth as PayPal looks to solidify its place in the competitive stablecoin market.

PayPal’s recent first-quarter earnings report showed a strong financial performance, with earnings exceeding analyst expectations and revenue rising 1% year-over-year to $7.8 billion. The company has also completed significant share repurchase activities, underscoring its ongoing financial strength.