Key Insights
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The SEC has closed its investigation into PayPal’s PYUSD stablecoin without taking enforcement action, ending a 2023 probe initiated via subpoena.
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PayPal is expanding PYUSD’s reach through partnerships with Coinbase, Anchorage Digital, and MoonPay, while offering U.S. users a 3.7% annual yield to boost adoption.
SAN FRANCISCO (MarketsXplora) – The U.S. Securities and Exchange Commission (SEC) has dropped its investigation into PayPal’s U.S. dollar-backed stablecoin, PayPal USD (PYUSD), the payments giant disclosed on Tuesday, as the firm moves to expand its footprint in the digital asset space.
In its latest quarterly filing, PayPal revealed that the SEC notified the company in February of its decision to close the inquiry without taking enforcement action. The probe stemmed from a subpoena issued in November 2023, which requested documents related to PYUSD, launched three months earlier.
“The SEC informed the company in February that the agency was closing the inquiry surrounding a 2023 subpoena related to PYUSD without enforcement action,” PayPal said in its Form 10-Q filing.
The announcement coincides with a broader shift in regulatory posture under current SEC leadership, which has recently moved to wind down investigations into other major crypto players. In the past three months, the agency also closed cases involving Crypto.com, Robinhood Crypto, Coinbase, and Gemini.
The closure of the SEC inquiry comes as PayPal looks to accelerate the adoption of PYUSD, which was introduced in August 2023 via a third-party issuer. While designed to be fully backed by U.S. dollar deposits, short-term Treasuries, and cash equivalents—and redeemable 1:1 for U.S. dollars—the stablecoin has struggled to gain significant market share.
As of late April, PYUSD’s market capitalization stood at approximately $880 million, far behind Tether’s USDT at $148.5 billion and Circle’s USDC at $62 billion. Despite its relatively small footprint, PYUSD has seen renewed momentum in 2025, with its circulating supply rising 75% since the start of the year, though still below its August 2024 peak.
PayPal Pushes PYUSD Expansion Following SEC Decision
In a bid to boost adoption, PayPal recently launched a loyalty program offering U.S. users an annual yield of 3.7% for holding PYUSD on its platform. Additionally, the company announced a series of strategic partnerships to enhance the stablecoin’s reach and functionality.
A key development includes PayPal’s collaboration with Coinbase, announced last week. The partnership allows users to buy, sell, and trade PYUSD on Coinbase with zero trading fees and redeem the token at a 1:1 ratio directly on the exchange.
“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center,” said Alex Chriss, PayPal President and CEO.
PayPal has also expanded PYUSD’s network support, adding compatibility with the Solana blockchain in May 2024 to reduce transaction costs and improve speed. Further efforts include partnerships with Anchorage Digital to develop a stablecoin reward program and with MoonPay to expand fiat onramps for purchasing PYUSD.
The stablecoin push comes as PayPal reported stronger-than-expected earnings for the first quarter of 2025. The company posted earnings of $1.33 per share, surpassing Wall Street estimates, with revenue rising 1% year-over-year to $7.8 billion. PayPal also highlighted significant share repurchase activity during the quarter.