- The U.S. Securities and Exchange Commission has closed its investigation into PayPal’s stablecoin, PYUSD, without taking action.
- This decision is part of a larger trend of the SEC easing its approach to cryptocurrency regulation under the current administration.
The SEC had been looking into PayPal’s dollar-backed stablecoin, PYUSD, since November 2023. The company recently shared that in February 2025, the SEC informed them that the inquiry was finished and no enforcement action would be taken. This comes as the SEC has been scaling back its tough stance on digital asset companies since President Donald Trump took office in January 2025.
Investigations and lawsuits against several major crypto firms, including Gemini, Coinbase, and Ripple Labs, have been dropped or put on hold. In the case of Ripple, the SEC and the company have a tentative agreement that could end their long legal dispute. As part of this agreement, the SEC has agreed to accept a reduced settlement amount from Ripple.
One key factor behind this shift is the new leadership at the SEC. Paul Atkins was recently sworn in as the 34th chairman of the commission. Chairman Atkins is known to be supportive of the digital asset space and was nominated by President Trump. He is expected to continue working on establishing clear rules for digital assets, aligning with President Trump’s stance on cryptocurrency.
PayPal launched PYUSD in August 2023 in partnership with Paxos Trust Company, a regulated entity in the U.S. PYUSD is designed to hold a value of $1.00, backed by U.S. dollars. It is available for users in the U.S. on PayPal and Venmo. Although it once reached a market value of over $1 billion, showing strong interest, its value has since decreased. PYUSD is currently trading at $0.9997, down 0.2%.
The stablecoin has struggled to gain momentum in a crowded market dominated by rivals Tether and Circle. PYUSD has a market capitalisation of just $880 million, less than 1% of Tether’s USDT $1.00 $148.5 billion. PayPal’s stablecoin has seen better growth this year, with a 75% increase in PYUSD circulating supply since the beginning of 2025. It remains down 14% from its peak supply of just over $1 billion in August 2024.
PYUSD’s growth may gain momentum following a company announcement on April 23 introducing a new loyalty program that allows U.S. users to earn 3.7% annually for holding the asset on the platform.
The following day, PayPal revealed a partnership with Coinbase aimed at boosting PYUSD adoption. PayPal President and CEO Alex Chriss expressed enthusiasm about collaborating with Coinbase and the broader cryptocurrency community to place PYUSD at the centre of innovative use cases.
The SEC’s decision to close the investigation could help build trust among large financial partners and everyday users, especially as stablecoins are still being closely watched globally. While there are no comprehensive U.S. laws specifically for stablecoins yet, lawmakers are discussing potential rules that could change how these assets are issued and used.
The post SEC Drops Probe Into PayPal’s Stablecoin, Signalling Regulatory Shift appeared first on ETHNews.
