SEC Closes Investigation Into PayPal’s PYUSD Stablecoin

In a major victory for the fintech payments leader, PayPal was given relief from the U.S. Securities and Exchange Commission (SEC) because the regulator recently shut down its probe into the PYUSD stablecoin of PayPal, with no enforcement action forthcoming.

SEC Shelves Inquiry into PYUSD

PayPal reported on April 29 in a regulatory filing that the SEC finished its probe of PYUSD, the company's U.S. dollar-backed stablecoin, introduced in 2023. The filing asserts that no enforcement action will be pursued.

The inquiry originated from a notice PayPal had to file information with regard to PYUSD upon the SEC's request in November of 2023. The company reported then that it was complying completely with the agency. 

What Is PYUSD?

It was introduced in 2023, and PYUSD is a USD-backed stablecoin that consists of cash and short-term US Treasuries. Notwithstanding the brand association with a reputable international payments company, PYUSD is yet to attract significant momentum relative to market leaders such as Tether's USDT and Circle's USDC.

Coinbase Partnership and Rewards Initiative

In April 2025, PayPal made significant moves to increase PYUSD adoption. On April 23, it rolled out a 3.7% annual rewards scheme for U.S. customers holding PYUSD.

A day later, on April 24, PayPal revealed a strategic collaboration with Coinbase, enabling U.S. customers to buy and sell PYUSD free of any trading charges. This waiver of fees is designed to make crypto payments more convenient and stablecoin usage more popular.

PYUSD Market Position

PYUSD has a market cap of approximately $880 million, according to CoinGecko, which is less than Tether's eye-watering $148.5 billion. Although PYUSD has increased by 75% since the beginning of 2025, it is still short of its August 2024 high of $1 billion by 14%.

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PayPal's Q1 Performance

In addition to the regulatory victory, PayPal posted solid Q1 2025 earnings. The firm reported $1.33 per share earnings, which surpassed Wall Street expectations of $1.16. Total revenue was $7.8 billion, which represented a 1% year-over-year increase.

Conclusion

The SEC investigation closure is a significant regulatory milestone for PayPal's PYUSD stablecoin. USD-backed and now facilitated through Coinbase's fee-free trading and reward incentives, PYUSD is slowly making inroads in the stablecoin space — despite still lagging behemoths like USDT. With further growth, the platform is poised to grow its presence in the Web3 and payments space.