Payments Giant Cleared as Agency Closes Inquiry With No Enforcement Action
PayPal has confirmed that the U.S. Securities and Exchange Commission (SEC) has officially closed its investigation into the company’s U.S. dollar-backed stablecoin, PayPal USD (PYUSD), without taking any enforcement action.
In an April 29 regulatory filing, PayPal revealed that it had been notified by the SEC in February that the inquiry had concluded. The company had previously disclosed in November 2023 that it received a subpoena from the SEC’s Division of Enforcement related to the launch and structure of PYUSD.
“The SEC notified us it was closing this inquiry without enforcement action,” PayPal stated.
Stablecoin Compliance and Competition
Launched in August 2023, PYUSD is described by PayPal as being fully redeemable for U.S. dollars and backed 1:1 by dollar deposits, short-term U.S. Treasuries, and cash equivalents.
Despite regulatory clarity, PYUSD has faced challenges gaining traction in a market dominated by incumbents Tether (USDT) and Circle’s USDC. PYUSD currently holds a market capitalization of around $880 million, making it less than 1% the size of Tether’s $148.5 billion footprint, according to CoinGecko.
However, the token has seen renewed momentum in 2025, with a 75% increase in circulating supply since the start of the year. Still, it’s down 14% from its August 2024 peak supply of just over $1 billion.
Growth Initiatives: Loyalty Rewards and Coinbase Partnership
In an effort to boost adoption, PayPal announced a new loyalty program on April 23, offering U.S. users 3.7% APY for holding PYUSD on the platform — a significant step toward making the stablecoin more competitive as a digital savings tool.
The following day, April 24, PayPal unveiled a partnership with Coinbase to further increase PYUSD usage across cryptocurrency markets.
“We are excited to drive innovative use cases with Coinbase and the crypto community, putting PYUSD at the center,” said Alex Chriss, PayPal President and CEO.
Financial Performance: PayPal Beats Wall Street Expectations
PayPal also reported strong Q1 earnings, exceeding analyst expectations:
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Earnings per share (EPS): $1.33 (vs. $1.16 expected)
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Revenue: $7.8 billion, up 1% year-over-year
The company highlighted robust share repurchase activity and emphasized its ongoing push into next-generation financial services, including stablecoins, crypto payments, and digital wallet innovation.
Final Thoughts: Regulatory Clarity Fuels New Momentum for PYUSD
With the SEC investigation closed and no enforcement looming, PayPal’s PYUSD now has the regulatory green light it needs to compete more aggressively in the stablecoin market.
As the company leverages its massive user base, new incentive programs, and high-profile crypto partnerships, PYUSD could gradually carve out a significant role as a trusted, mainstream digital dollar in both Web2 and Web3 environments.
The stablecoin race is far from over — and PayPal just got a head start.
