SEC closes investigation into PayPal’s $880 million stablecoin

PayPal announced in an April 29 regulatory filing that the U.S. Securities and Exchange Commission (SEC) has ended its investigation into PayPal USD (CRYPTO:PYUSD), the company’s US-dollar-backed stablecoin, without taking enforcement action.  

The inquiry began in November 2023 when the SEC’s Division of Enforcement issued a subpoena requesting documents related to PYUSD.  

PayPal said it cooperated fully with the SEC and was notified in February 2025 that the agency was closing the inquiry without pursuing any enforcement measures.  

PYUSD is designed to be fully redeemable for U.S. dollars and backed by dollar deposits, including short-term Treasuries and cash equivalents.  

Despite its backing, PYUSD has struggled to gain significant market share in a competitive stablecoin market dominated by Tether (USDT) and Circle’s USD Coin (CRYPTO:USDC).  

As of April 2025, PYUSD’s market capitalization stands at approximately $880 million, less than 1% of Tether’s $148.5 billion.  

The stablecoin’s circulating supply has grown 75% since early 2025 but remains below its peak supply of just over $1 billion in August 2024.  

To boost adoption, PayPal recently introduced a 3.7% annual yield on PYUSD holdings for U.S. users, alongside a partnership with Coinbase aimed at expanding usage.  

“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.

The SEC’s decision removes a regulatory cloud over PYUSD, potentially easing concerns among institutional and retail users regarding compliance risks.  

PayPal also reported strong first-quarter earnings, beating analyst expectations with $1.33 earnings per share and $7.8 billion in revenue, alongside significant share repurchases.  

At the time of reporting, the PayPal USD (PYUSD) price was $1.