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PayPal has said the SEC has dropped its investigation of PYUSD.
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The decision offers another insight into the current SEC’s stance on stablecoins.
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PayPal is looking to make strides in the cryptocurrency industry with PYUSD as the focus.
During Gary Gensler‘s tenure as chair of the Securities and Exchange Commission, the agency launched several cryptocurrency-related enforcement actions and investigations, arguing that most cryptocurrencies were unregistered securities.
However, in the months following Gensler’s departure, the SEC has paused and dismissed cryptocurrency-related enforcement actions and investigations as part of a broader pro-crypto shift under President Donald Trump.
In the latest instance, PayPal (NASDAQ:PYPL) said that the SEC has ended a probe of its dollar-backed stablecoin product, PayPal USD or PYUSD.
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In a Tuesday regulatory filing, PayPal said the SEC closed its investigation of PYUSD “without enforcement action.”
PayPal first received notice of the probe in November 2023. At the time, the SEC sent a subpoena requesting “the production of documents” tied to PYUSD, the firm said, without specifying what documents the agency requested.
The decision to drop the PYUSD probe offers another indication of the current SEC’s stance on stablecoins.
In an April 4 statement, SEC Division of Corporation Finance staff issued guidance stating that it did not view fully backed dollar-pegged stablecoins marketed for payments and not for interest or yield as security offerings.
At the same time, the move is a significantly positive development for PayPal as the firm shows a renewed desire to make inroads into the cryptocurrency space through PYUSD.
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“We’re moving quickly to bring the benefits of crypto and stablecoins to our customers and the industry,” PayPal CEO Alex Chriss said during the firm’s Q1 earnings call on Tuesday.
Indeed, last week, the firm unveiled a loyalty offering for U.S. users holding PYUSD in their PayPal and Venmo wallets, offering 3.7% annual rewards.