David Edwards
With no enforcement measures taken, the U.S. Securities and Exchange Commission has formally concluded its investigation of PayPal Holdings Inc.’s U.S. dollar-pegged stablecoin, PYUSD. This decision eliminates a significant regulatory burden for the payments behemoth.
PayPal said in a regulatory filing dated April 29 that the SEC informed the company in February that the investigation into its stablecoin activities was concluded. In November 2023, the SEC’s Division of Enforcement issued a subpoena to begin the inquiry, which sought documents pertaining to the issuance and support of PYUSD. Throughout the process, PayPal claimed to have worked completely with the government.
PYUSD, a stablecoin produced by Paxos Trust Company and promoted by PayPal, was introduced in August 2023. The token is supposed to be 1:1 redeemable and fully backed by short-term Treasurys, U.S. dollar deposits, and other cash equivalents. In a market dominated by market leaders Tether (USDT) and Circle’s USD Coin (USDC), the asset hasn’t gained much traction yet.
The market value of PYUSD is $880 million as of April 2025, which is less than 1% of Tether’s $148.5 billion worth. PYUSD has seen recent growth despite its lackluster market share, with circulating supply up 75% year-to-date but still down 14% from its August 2024 top of just over $1 billion.
In April, PayPal unveiled two significant initiatives aimed at increasing user engagement and adoption. The company’s loyalty rewards program, which offers U.S. users an annual payout of 3.7% on PYUSD accounts, was launched on April 23. The next day, PayPal announced a strategic alliance with Coinbase to increase the stablecoin’s use and usefulness in the larger cryptocurrency market.
“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 PayPal President and CEO Alex Chriss.
These developments follow successful financial outcomes. PayPal’s Q1 2025 earnings of $1.33 per share above expert projections of $1.16, exceeding Wall Street estimates. Revenue reached $7.8 billion, up 1% from the previous year. During the quarter, the company also carried out significant share repurchases, demonstrating its confidence in its long-term growth plan.
