The U.S. Securities and Exchange Commission (SEC) has ended its investigation into PayPal’s dollar-backed stablecoin PYUSD without taking enforcement action, the company disclosed in a regulatory filing.
In a Form 10-Q, PayPal said the SEC informed the company in February 2024 that it was closing the inquiry, which began with a subpoena issued in November 2023. The subpoena requested documents related to the launch and operation of PYUSD but did not result in any legal action.
PayPal launched PYUSD in August 2023 through a third-party issuer. The stablecoin has since struggled to gain ground against market leaders Tether (USDT) and Circle’s USDC, with a current market cap of $879.9 million, compared to USDT’s $148.4 billion and USDC’s $62 billion.
The disclosure comes shortly after PayPal and Coinbase announced a partnership to waive trading fees on PYUSD. Users can now buy, sell, and redeem PYUSD on Coinbase without platform charges and convert the stablecoin to U.S. dollars at a 1:1 rate.
Coinbase previously reserved zero-fee treatment for only one stablecoin—Circle’s USDC, the second-largest stablecoin by market value.
In an effort to expand PYUSD’s footprint, PayPal deployed the token on Solana in May 2024 and partnered with Anchorage Digital to build a reward system around the stablecoin. The company also teamed up with MoonPay to offer more payment methods for PYUSD purchases.
The integration is said to address issues related to declined crypto purchases via debit card, with MoonPay asserting that it will improve the success rate of crypto transactions, even when using the same debit card. Furthermore, existing PayPal users will no longer need to manually input their card information when buying cryptocurrencies on MoonPay.
Meanwhile, PayPal will soon offer U.S. users a 3.7% annual return on its dollar-backed stablecoin as part of a broader push to grow its presence in digital assets.