The U.S. Securities and Exchange Commission (SEC) has ended its investigation into PayPal’s dollar-pegged stablecoin, PYUSD, without taking any enforcement action.
The payments giant disclosed the development in its Q1 2025 earnings report, confirming that the regulator closed its inquiry in February after issuing a subpoena in November 2023.
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PayPal cleared as SEC eases crypto regulation
The SEC’s decision marks another step back from its aggressive stance on crypto-related firms. Over the past few months, the regulator has dropped investigations into major players like Ripple, Coinbase, Robinhood, and Crypto.com.
PayPal fully cooperated with the authorities' request for documents related to PYUSD, which launched in August 2023.
“In February 2025, the SEC communicated it was closing this inquiry without enforcement action,” PayPal stated in its filing.
The stablecoin, backed by U.S. dollar deposits and short-term Treasuries, has struggled to compete with market leaders Tether (USDT) and Circle’s USDC. PYUSD’s market cap stands at $880 million—a part of Tether’s $148.5 billion dominance.
Despite its slow start, PYUSD has shown growth in 2025, with circulating supply rising 75 percent since January. To stimulate adoption, the company recently introduced a 3.7 percent annual yield for U.S. users holding PYUSD on its platform and partnered with Coinbase to expand the stablecoin’s utility.
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Expanding PYUSD’s reach
PayPal’s collaboration with Coinbase aims to drive innovation in stablecoin solutions, including fee-free redemptions.
“We are excited to drive new, exciting, and innovative use cases together with Coinbase and the entire cryptocurrency community, putting PYUSD at the center,” said PayPal CEO Alex Chriss.
The company’s strong Q1 earnings—$1.33 per share, beating Wall Street’s $1.16 estimate—further solidified its position as it expands into the crypto sector.
With regulatory hurdles cleared, the financial company is now focused on gaining a larger share of the stablecoin market.
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