Without enforcement action, the U.S. Securities and Exchange Commission has concluded its investigation into PayPal dollar-backed Stablecoin, PayPal USD (PYUSD), and has ended its chapter on regulations that began more than a year ago, the company said.
“In November 2023, I received a subpoena from the US SEC executive in connection with PayPal USD Stablecoin, which requested the preparation of a document.
Wednesday's filing shows the latest SEC move to halt investigations and lawsuits against crypto companies. Regulators have notified more than a dozen businesses that they will drop their investigations and cases.
Read more: PayPal Faces sec subpoena over pyusd stablecoin
Stablecoins – digital tokens pinned to Fiat currencies like the US dollar – are the focus of discussions about how crypto should be regulated. Regulators have questioned whether these devices resemble securities or money market funds, allowing them to scrutinize issues such as circles and tethers. PayPal's involvement attracted additional attention due to its size, brand awareness, and reach across traditional and digital finance.
In the case of PayPal, SEC probe resolution keeps pushing blockchain-based payments deeper, thus removing important regulatory overhangs. The company launched PYUSD in August 2023 as a stubcoin charged with dollars supported by short-term US Treasury invoices and dollar deposits designed for use in peer-to-peer payments, commercial transactions and decentralized applications.
This news also comes when Stablecoins is becoming the hottest trend among Crypto and Tradfi companies. Companies such as Ripple, MasterCard, Visa, Dutch Bank Ing and Stripe are all involved in the Stablecoin industry. Ripple even reported that it provided $4 billion or $5 billion to buy the Stablecoin Issuer Circle. Meanwhile, venture company Andreessen Horowitz (A16Z) said Stablecoins are on the “Whatsapp Moment” of money transfers, which could disrupt the payments industry as instant messaging did with cross-border calls and texts.
Amid the growing competition, PayPal recently said it has been set to start offering users a 3.7% yield on PYUSD's balance to raise Stablecoin Wars ante. According to data from CoinmarketCap, the paying giant Stablecoin, has a market capitalization of $887 million, making it sixth among Stablecoin publishers.
Read more: Stablecoin Market could grow to $2T by the end of 2028: Standard Chartered
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