Key Highlights:

• The SEC has finished its investigation into PayPal’s stablecoin, PYUSD, and confirmed no enforcement actions will be taken as stated by the company.
• PayPal introduced PYUSD in August 2023, which is supported by U.S. Treasury bills and dollar deposits.
• The stablecoin sector continues to expand, with PayPal providing a 3.7% yield on PYUSD to increase user engagement.

The U.S. Securities and Exchange Commission has concluded its inquiry into PayPal’s dollar-backed stablecoin, PYUSD, without enforcing any actions. This brings an end to a regulatory saga that commenced over a year ago.

“In November 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requested the production of documents. In February 2025, the SEC communicated it was closing this inquiry without enforcement action,” PayPal disclosed in a recent filing.

This marks the SEC’s ongoing trend of dropping investigations against crypto firms, as it has reassured numerous companies that it would close their inquiries or cases.

Stablecoins, which are digital currencies pegged to fiat currencies like the U.S. dollar, have been central to regulatory discussions. Authorities have scrutinized whether these assets resemble securities or money market funds, affecting issuers such as Circle and Tether. Given PayPal’s extensive reach and reputation, its involvement has gained significant attention.

The resolution of the SEC’s assessment provides PayPal with a crucial regulatory advantage as it ventures further into blockchain payment solutions. The company rolled out PYUSD on Ethereum in August 2023, intending to facilitate peer-to-peer transactions and commerce.

Currently, as the competitive landscape heats up, PayPal is prepared to offer U.S. customers a 3.7% yield on their PYUSD to incentivize broader adoption. The market capitalization for this stablecoin stands at $887 million, positioning it as the sixth-largest stablecoin issuer according to CoinMarketCap.