SEC Ends PayPal Investigation: PYUSD Emerges Victorious!

The U.S. Securities and Exchange Commission (SEC) has closed its investigation into PayPal’s stablecoin project, PYUSD, without imposing any penalties. According to PayPal’s latest 10-Q form, the SEC officially informed PayPal in February that the investigation was concluded. This outcome signifies a significant relief for PayPal, allowing the company to proceed without regulatory concerns.

PYUSD Investigation Quietly Concludes

In November 2023, PayPal received a formal request from the SEC to submit documents related to PYUSD. Such requests are usually intended for information gathering and rarely conclude with legal enforcement. The official closure of this process represents an immense relief for PayPal, easing the company’s burden significantly.

Following the SEC’s announcement to close the investigation, it was made clear that PayPal wouldn’t face any fines, enforcement action, or regulatory restrictions. This is a substantial assurance for the company to continue its endeavors in the stablecoin sector.

PYUSD was launched by PayPal in August 2023 through a third-party issuer. However, its impact in the sector remained limited compared to established contenders like Tether ( USDT ) and Circle (USDC).

Partnerships and Expansion Plans Continue

Right after the investigation’s conclusion, there was significant news of collaboration aimed at increasing interest in PYUSD. PayPal and Coinbase announced that no platform fees would be imposed on PYUSD transactions, providing an enticing incentive for users of the U.S.-based crypto exchange. PYUSD transactions on Coinbase could be seamlessly converted 1:1 with the U.S. dollar.

Additionally, the company focused on strengthening its technical infrastructure to expand the stablecoin’s applicability. In May 2024, PYUSD was integrated into the Solana $148 network, offering faster and more cost-effective transfers as a user-friendly alternative.

Furthermore, PayPal initiated collaborations with Anchorage Digital to develop reward programs using PYUSD. This initiative aims to enable users to access specific incentives by merely holding stablecoins.

The partnership with MoonPay is also noteworthy. This collaboration makes it much easier for users to purchase PYUSD, particularly enhancing accessibility to stablecoins through mobile payment channels and alternative financial applications.

PYUSD’s Market Share Still Limited

Despite PayPal’s significant strides to expand its stablecoin project, PYUSD’s market value remains considerably low compared to its rivals. Current data show PYUSD’s total market value is $879.9 million, while Tether’s USDT holds a market value of $148.4 billion, and Circle’s USDC stands at $62 billion.

Thus, PYUSD still has a long journey ahead to enter the “big league.” However, the absence of SEC pressure and its expanding use due to new partnerships could ease this journey. Integration with major U.S.-based platforms could especially make PayPal’s product a part of global payment systems.