SEC drops investigation into PayPal’s stablecoin

PayPal announced that the U.S. Securities and Exchange Commission (SEC) has ended its investigation into PayPal’s stablecoin, called PayPal USD (PYUSD), and will not take any action according to April 29 SEC regulatory filing.

Back in November 2023, PayPal received a subpoena from the SEC asking for documents related to PYUSD. At the time, PayPal said it was cooperating with the request. In February 2025, the SEC told PayPal it was closing the investigation without any penalties.

PYUSD is a digital coin tied to the U.S. dollar and backed by dollar deposits, short-term government bonds, and similar assets. Despite this, PYUSD has struggled to compete with larger stablecoins like Tether and Circle. Currently, PYUSD’s market size is about $880 million—less than 1% of Tether’s $148.5 billion.

However, PYUSD has seen better growth recently. Since the start of 2025, its supply has increased by 75%, although it’s still 14% below its peak in August 2024.

To boost usage, PayPal announced on April 23 that U.S. users can now earn 3.7% a year by holding PYUSD as part of a new loyalty program. A day later, PayPal also revealed a new partnership with Coinbase to help promote PYUSD.

PayPal CEO Alex Chriss said the company is excited to work with Coinbase and the wider crypto community to create new ways to use PYUSD.

In addition, PayPal reported strong financial results for the first quarter of 2025. The company earned $1.33 per share, beating analysts’ forecast of $1.16. Revenue was up slightly to $7.8 billion, and PayPal also completed major stock buybacks.