SEC Drops Probe Into PayPal’s Stablecoin, Clearing Path for Crypto Expansion

Regulatory clouds have cleared for PayPal’s stablecoin, PYUSD, as the SEC has officially ended its investigation without pursuing any enforcement.

The update, quietly disclosed in the company’s Q1 2025 filing, marks a significant moment for PayPal’s expanding crypto ambitions.

PYUSD, launched in partnership with Paxos in mid-2023, had drawn attention from U.S. regulators soon after its debut. While the reasons behind the SEC’s inquiry were never made public, PayPal confirmed that the agency has wrapped up its review and won’t be taking further action. With that hurdle removed, the fintech firm may now move more freely in its push to integrate blockchain-based payments into everyday use.

PayPal has made steady progress in building out its crypto offerings, including allowing users to buy and sell digital assets like Bitcoin and Ethereum. But its stablecoin initiative remains central to its long-term vision. PYUSD is pegged to the U.S. dollar, supported by reserves and short-term Treasuries, and is positioned as a tool for fast, low-cost payments.

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Despite limited adoption so far, the company is promoting the token for peer-to-peer transfers and merchant checkouts. Executives view stablecoins as a key part of the future financial infrastructure, with plans to expand integration across PayPal’s suite of services. Coinbase has also joined the effort by removing fees for PYUSD transactions, signaling growing momentum for the token’s role in mainstream digital payments.

PayPal’s earnings for the first quarter showed modest growth, with revenues reaching $7.79 billion. Though the report didn’t detail PYUSD-specific usage, it did note the adoption of updated accounting standards for crypto assets.

Alexander Stefanov