PayPal's PYUSD Stablecoin Investigation Concluded Without Enforcement Action

The US Securities and Exchange Commission (SEC) has closed its inquiry into PayPal's US dollar-pegged stablecoin, PYUSD, without taking any enforcement action, the payments company disclosed in a regulatory filing on Sunday.

The probe, which began in November following a subpoena from the SEC's Division of Enforcement requesting documents related to the stablecoin, was confirmed by PayPal at the time, and the company added that it was cooperating fully with the regulator.

In its latest filing, the company said it was informed in February that the SEC would be closing the case.

"On November 9, 2023, the U.S. Securities and Exchange Commission's Division of Enforcement subpoenaed the company for documents and information relating to, among other things, the company's PayPYUSD stablecoin," PayPal said in the filing.

"On February 19, 2025, the Division of Enforcement informed the company that it was closing its inquiry into the stablecoin without recommending any enforcement action."

Launched in August, PayPal's stablecoin is marketed as fully backed and redeemable for US dollars, supported by deposits in cash and short-term treasuries.

Despite the backing and PayPal's prominent position in the digital payments space, PYUSD has struggled to compete in a market dominated by industry leaders like Tether and Circle.

With a current market capitalization of approximately $880 million, PYUSD holds less than 1% of Tether's $148.5 billion in circulation.

However, there have been signs of renewed momentum. Since the start of 2025, PYUSD's circulating supply has grown by 75%, according to data from CoinGecko, though it remains 14% below its peak in August.

The boost comes amid new initiatives aimed at increasing adoption, including a loyalty program announced on Monday that offers U.S. users 3.7% annual rewards for holding PYUSD.

"We are always looking for ways to enhance the value proposition for our U.S. customers and provide them with innovative products and services they can use and enjoy," said Geoffrey Rehner, president and chief operating officer of PayPal.

"This new program offers our customers an excellent rate of return for keeping their money in PYUSD, and it is an example of how we are leveraging technology to create unique experiences for our customers."

PayPal also unveiled a strategic partnership with Coinbase to drive broader use of the stablecoin.