The U.S. Securities and Exchange Commission (SEC) has officially closed the investigation into PayPal USD (PYUSD) stablecoin without taking any enforcement action – according to the latest disclosure from PayPal in its recent quarterly financial report.
Specifically, in the sample 10-Q filing submitted on April 29, 2025, PayPal stated that the SEC announced in February that it would conclude the investigation related to the subpoena issued in 2023 regarding PYUSD. This subpoena was sent by the SEC in November 2023, requesting PayPal to provide documents related to the issuance of the PYUSD stablecoin. Typically, the issuance of a subpoena by the SEC does not equate to legal action but is usually aimed at gathering information for an initial assessment.
Information about the conclusion of the investigation was announced immediately after PayPal and the cryptocurrency exchange Coinbase declared a strategic partnership. Accordingly, Coinbase users can now trade PYUSD completely free of platform fees, while also able to convert PYUSD at a 1:1 ratio to USD directly on the exchange. This move is expected to significantly boost liquidity and the usage of PYUSD in the market.
PYUSD was introduced by PayPal in August 2023 through a third-party issuer. However, this stablecoin has not yet achieved significant market share compared to its two major competitors, Tether's USDT and Circle's USDC. According to data from The Block, the market capitalization of PYUSD is currently around $879.9 million – a rather modest figure compared to USDT's $148.4 billion and USDC's $62 billion.
To expand the application scope and promote acceptance, PayPal has actively implemented many new strategies for PYUSD. In May 2024, PayPal announced support for PYUSD on the Solana blockchain, allowing for high-speed transactions at low costs. Additionally, the company has partnered with Anchorage Digital to develop a rewards program using stablecoins and collaborated with MoonPay to expand payment options for purchasing PYUSD with fiat currency.
The SEC's official conclusion of the investigation without taking any action further strengthens confidence in the legal compliance of PYUSD, while also paving the way for PayPal to continue expanding its position in this increasingly competitive stablecoin sector.
