SEC abandons investigation into PayPal stablecoin

Author: Martin Young, CoinTelegraph; Translated by: Deng Tong, Golden Finance

PayPal said the Securities and Exchange Commission (SEC) has abandoned its investigation into its dollar stablecoin.

PayPal said in a regulatory filing file filed on April 29 that the SEC has concluded its investigation into PayPal USD (PYUSD) and will not take any action.

The company said it received a subpoena from SEC law enforcement in November 2023 for its stablecoin.

PayPal said at the time: "The subpoena requires relevant documents. We are cooperating with the SEC's investigation."

The company said in its latest filing that the SEC had notified it in February that it would “conclude the investigation without taking enforcement action.”

PayPal said its stablecoins are 100% exchanged for the U.S. dollar and are backed “fully” by dollar deposits, including short-term Treasury bonds and cash equivalents.

However, in a crowded market dominated by competitors Tether and Circle, the stablecoin has struggled to gain momentum. PYUSD's market capitalization is only $880 million, less than 1% of Tether's $148.5 billion.

PayPal USD market capitalization. Source: CoinGecko

The benefits of PYUSD's cooperation with Coinbase

On April 23, PayPal announced a new loyalty program that provides incentives for PYUSD, and U.S. users can earn 3.7% annual revenues on the PayPal platform, which may further drive PYUSD growth.

Meanwhile, on April 24, PayPal announced a partnership with Coinbase to expand PYUSD adoption.

“We are excited to join hands with Coinbase and the entire cryptocurrency community to promote new, exciting and innovative use cases and put PYUSD at the heart of the world,” said Alex Chriss, President and CEO of PayPal.

The payment giant also reported strong first-quarter results and completed important stock buybacks.

The company's first-quarter earnings per share was $1.33, surpassing Wall Street expectations and above analysts' expectations of $1.16. Revenue increased by 1% year-on-year to US$7.8 billion.