PayPal says the U.S. Securities and Exchange Commission has ended its investigation into its PYUSD stablecoin without taking any enforcement action.
In a regulatory filing on Apr. 29, PayPal confirmed the SEC had wrapped up its inquiry and decided not to pursue enforcement. The investigation began in November 2023, when the SEC’s Division of Enforcement issued a subpoena asking PayPal to provide documents related to the launch and structure of PYUSD.
The company said it cooperated fully. In its latest filing, it revealed that the SEC informed it in February that it “was closing this inquiry without enforcement action.”
The stablecoin, launched in August 2023, is fully backed by U.S. dollar deposits, including short-term Treasuries and other cash equivalents. It is designed to be redeemable 1:1 for U.S. dollars and is primarily issued on the Ethereum (ETH) and Solana (SOL) blockchains.
In a market already dominated by USD Coin (USDC) and Tether (USDT), PYUSD has had a sluggish start despite the financial giant’s backing and support. After reaching a $1 billion market cap in August 2024, PYUSD’s circulating supply dropped to $460 million before rebounding to its current $880 million supply, as per DeFiLlama data.
To boost adoption, PayPal introduced a 3.7% annual reward for PYUSD holdings on Apr. 23. Users in the U.S. holding PYUSD in PayPal or Venmo wallets will earn daily rewards, credited monthly, starting summer of 2025. Rewards can be used for purchases, peer-to-peer transfers, crypto exchanges, or international payments through PayPal’s Xoom service.
PayPal CEO Alex Chriss said the company sees stablecoins as a key part of future payments, adding that PYUSD is already being used for commerce, crypto, and peer-to-peer transfers.
PayPal still needs to be aware of the dangers associated with potential abuse and future regulations. It pointed out that the stablecoin’s reputation might be impacted by any legal issues involving its partners or the use of PYUSD in illegal activities.
The SEC’s decision echoes a similar outcome in the Paxos-BUSD case and could signal growing clarity for stablecoin issuers moving forward.
