SEC Drops Probe Into PayPal's PYUSD Stablecoin
PayPal has concluded its SEC investigation into its stablecoin operations without facing enforcement action. The SEC informed PayPal in February that it was closing the inquiry regarding the PayPal USD (PYUSD) stablecoin. The investigation began with a subpoena in November 2023, seeking documents related to potential securities violations. PYUSD, launched on Ethereum and backed by short-term Treasuries and cash equivalents, has seen its market cap rise to approximately $880 million from under $500 million earlier this year. PayPal recently partnered with Coinbase to enhance PYUSD's market presence, allowing fee-free trading and 1:1 redemption for U.S. dollars. The SEC's decision reflects a shift away from aggressive regulatory strategies under previous leadership, coinciding with broader legislative efforts to regulate the stablecoin sector, including the STABLE Act and GENIUS Act, which aim to establish clear rules for stablecoin issuance and oversight.
