SEC drops investigation into PayPal stablecoin

Author: Martin Young, CoinTelegraph; Compiler: Deng Tong, Golden Finance

PayPal said the U.S. Securities and Exchange Commission (SEC) has dropped its investigation into its U.S. dollar stablecoin.

PayPal said in a regulatory filing on April 29 that the SEC has closed its investigation into PayPal USD (PYUSD) and will not take any action.

The company said it received a subpoena from the SEC Enforcement Division regarding its stablecoin in November 2023.

PayPal said at the time: "The subpoena requested relevant documents. We are cooperating with the SEC's investigation."

The company said in its latest filing that the SEC notified it in February that it "will close the investigation without taking enforcement action."

PayPal said its stablecoin is 100% redeemable for U.S. dollars and is "fully backed" by U.S. dollar deposits, including short-term Treasury bills and cash equivalents.

However, the stablecoin has struggled to gain momentum in a crowded market dominated by rivals Tether and Circle. PYUSD has a market cap of just $880 million, less than 1% of Tether’s $148.5 billion.

PayPal USD market cap. Source: Coingecko

PYUSD benefits from partnership with Coinbase

On April 23, PayPal announced a new loyalty program to reward PYUSD, with U.S. users earning 3.7% per year for holding the asset on the PayPal platform, which could further boost PYUSD's growth.

Meanwhile, on April 24, PayPal announced a partnership with Coinbase to expand PYUSD adoption.

“We are excited to work with Coinbase and the entire cryptocurrency community to drive new, exciting and innovative use cases, with PYUSD at the core,” said Alex Chriss, president and CEO of PayPal.

The payment giant also reported strong first-quarter results and completed a significant share repurchase.

The company’s first-quarter earnings per share were $1.33, beating Wall Street expectations and higher than analysts’ expectations of $1.16. Revenue grew 1% year-over-year to $7.8 billion.