The SEC issued a subpoena to PayPal in late 2023 regarding its dollar-backed stablecoin.
The U.S. Securities and Exchange Commission has closed its investigation into PayPal USD (PYUSD), the company’s dollar-backed stablecoin, without taking enforcement action, marking the end of a regulatory chapter that had begun over a year ago, according to the company.
“In November 2023, a subpoena was received from the U.S. SEC Division of Enforcement regarding the PayPal USD stablecoin. The subpoena requested the production of documents. In February 2025, it was communicated by the SEC that the inquiry was being closed without enforcement action,” PayPal disclosed in a filing this week.
Wednesday’s filing marks the latest move by the SEC to drop investigations and lawsuits against crypto companies. Over a dozen firms have been informed by the regulator that investigations and cases would be dropped.
Stablecoins, which are digital tokens pegged to fiat currencies such as the U.S. dollar, have become a central topic in the discussion over crypto regulation. Regulators have raised questions about whether these instruments resemble securities or money market funds, potentially subjecting issuers like Circle and Tether to more scrutiny. PayPal’s involvement has attracted additional attention due to its size, brand recognition, and its broad reach in both traditional and digital finance.
For PayPal, the resolution of the SEC’s probe removes a significant regulatory obstacle as the company expands further into blockchain-based payments. PYUSD was launched on Ethereum in August 2023 as a dollar-pegged stablecoin, backed by short-term U.S. Treasury bills and dollar deposits. It was designed to be used in peer-to-peer payments, commerce, and decentralized applications.
The news also arrives as stablecoins gain significant traction among both crypto and traditional financial firms. Companies like Ripple, Mastercard, Visa, Dutch bank ING, and Stripe are entering the stablecoin space. Ripple has even reportedly offered $4 billion to $5 billion to acquire stablecoin issuer Circle. Additionally, venture firm Andreessen Horowitz (a16z) stated that stablecoins are experiencing a “WhatsApp Moment” for money transfers, with the potential to revolutionize the payments industry in the same way instant messaging transformed cross-border phone calls and texts.
Amid growing competition, PayPal recently announced that it will offer U.S. users a 3.7% yield on their PYUSD balances to strengthen its position in the stablecoin market. With a market cap of $887 million, the payment giant’s stablecoin is ranked sixth among stablecoin issuers, as reported by CoinMarketCap data.
, the company’s dollar-backed stablecoin, without taking enforcement action, marking the end of a regulatory chapter that had begun over a year ago, according to the company.){kind=link}