SEC Closes Investigation Into PayPal’s PYUSD Without Action

Highlights:

• The SEC has ended the PayPal PYUSD case with no action after months of review.
• PYUSD has grown 75% in supply in 2025 but still holds under 1% of Tether’s market value.
• PayPal has surpassed earnings estimates as total payment volume reaches $417 billion.

The United States Securities and Exchange Commission has officially ended its inquiry into PYUSD, a dollar-backed stablecoin introduced by PayPal. PayPal confirmed that the SEC had decided to close the case and that it would not pursue any enforcement steps in a filing submitted yesterday. The SEC issued a subpoena to the Division of Enforcement of PayPal in 2023. PayPal acknowledged at the time that the subpoena was seeking documentation related to its stablecoin product.

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U.S. SEC closes PayPal's PYUSD probe without action

The @SECGov has ended its investigation into PYUSD, @PayPal's U.S. dollar-pegged stablecoin, without taking enforcement action, according to @cryptonews. In an April 29 filing, PayPal disclosed that the SEC’s Division of…

— CoinNess Global (@CoinnessGL) April 30, 2025

The SEC informed PayPal in February that it would be closing the investigation without moving forward with any charges. This development comes during a time when the SEC has dropped several crypto-related cases. The agency dropped cases against firms such as Coinbase, Robinhood, and Kraken. Moreover, the agency recently concluded the Ripple case. However, the agency has not released an official confirmation on the matter. Despite the conclusion of the case, there is no clear policy direction on stablecoins.

Earlier this year, Representatives French Hill from Arkansas and Bryan Steil from Wisconsin introduced the STABLE Act. The aim of the bill is to establish federal and state oversight on stablecoins and modify the securities law to clarify that stablecoins are not securities. Even with the effort, however, the laws that govern the industry are still very ambiguous. Recent actions by the SEC indicate a possible shift in how it’s going to deal with crypto products in the future.

PYUSD Sees Slow Growth but Recent Efforts Bring Momentum

Although the ending of the case brings some relief to PayPal, its stablecoin has not gained major adoption when compared to other stablecoins in the market. In comparison, PYUSD, introduced by Paxos, has a market value of $879.95 million compared to USDT, which has a market value of $148.44 billion, according to data. However, the supply of PYUSD has increased by 75% since January. While this gain is positive, it is still 14% below its August peak of more than $1.01 billion.

PayPal has taken new steps to encourage use of the stablecoin by introducing incentives for its users. The company recently launched a feature that offers users in the United States an annual return of 3.7% for holding PYUSD within its platform. Meanwhile, PayPal also signed a new agreement with Coinbase. The partnership is designed to increase the presence of PYUSD across different platforms and wallets.

PayPal Posts Strong First Quarter Results

In its latest earnings report, PayPal reported strong results for Q1. The company’s earnings per share rose by 23% to $1.33 per share in the first quarter. Analysts had predicted $1.16 per share before the release of the report. Net income rose 45% to $1.3 billion, and total revenue reached $7.8 billion.

We reported first quarter results today, delivering strong performance to start the year. PayPal is transforming from a payments company to a commerce platform. We are well-positioned to support both consumers and merchants as they navigate today’s evolving environment. Thanks to… pic.twitter.com/QL22bBAq3c

— PayPal (@PayPal) April 29, 2025

The new cost-saving efforts of PayPal have reduced operating expenses by 4%. PayPal has reported net positive earnings in the last four quarters too. The company’s number of active accounts also climbed 2% to reach 436 million.

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