Key Takeaways:

• The U.S. SEC has formally ended its investigation into PayPal’s stablecoin PYUSD with out pursuing enforcement motion.
• PayPal has introduced a 3.7% annual yield for U.S. customers holding PYUSD and fashioned a brand new partnership with Coinbase to spice up adoption.
• Although its market share continues to be lowly in comparison with Tether and Circle, PYUSD’s circulating provide has elevated by 75% in 2025.

PayPal’s U.S. dollar-backed stablecoin, PYUSD, has been investigated by the U.S. Securities and Alternate Fee (SEC). PayPal is hurrying to push PYUSD by way of incentives and recent strategic alliances for the reason that probe is over and no enforcement motion is being sought.

Learn Extra: SEC Approves ProShares’ XRP Futures ETFs

SEC Closes PYUSD Investigation With out Submitting Costs

PayPal (NASDAQ: PYPL) mentioned in a regulatory submitting filed on April 29 that the SEC’s Division of Enforcement has formally concluded its inquiry into PYUSD, the stablecoin of the agency linked to the U.S. greenback.

The SEC’s subpoena asking for papers concerning the growth and administration of PYUSD began the investigation in November 2023. PayPal claimed again then that it was completely working with the authority. The company instructed the enterprise in February 2025 that it was ending the matter with out extra motion.

Underneath its current management, the SEC appears to be decreasing enforcement strain on cryptocurrency firms, which is in step with a bigger pattern. The company has additionally ceased investigations in opposition to Crypto.com, Robinhood Crypto, Coinbase, and Gemini in current months, indicating a change in regulatory angle following years of elevated scrutiny.

PayPal’s regulatory transparency now provides a clearer street forward for PYUSD to compete extra strongly within the stablecoin market growingly crowded.

Learn Extra: SEC Updates the Agenda and Panel Members for the Cryptocurrency Roundtable on April 11

PYUSD Nonetheless Faces Market Challenges

Regardless of the regulatory win, PYUSD continues to be removed from dominant. With a market capitalization of virtually $880 million, the stablecoin launched in August 2023 ranks sixth amongst stablecoins in line with CoinMarketCap. In distinction, Tether (USDT) and Circle’s USD Coin (USDC) management a lot of the market; Tether by alone exceeds $148 billion in market cap.

Redeemable 1:1 for U.S. {dollars}, PYUSD is supposed to be fully backed by a mixture of U.S. greenback deposits, short-term U.S. Treasuries, and money equivalents. These traits mirror these of main rivals, however person adoption has been slower.

Nonetheless, 2025 has seen optimistic momentum. In response to CoinGecko, the circulating provide of PYUSD has risen by 75% since January 1, indicating renewed curiosity. Nevertheless, that determine stays 14% under its peak in August 2024, when provide briefly topped $1 billion.

Strategic Strikes to Broaden PYUSD Adoption

Loyalty Rewards and Coinbase Partnership

To speed up development, PayPal launched a loyalty reward program on April 23, providing 3.7% annual yield to U.S. customers who maintain PYUSD of their accounts. This incentive seeks to put PYUSD not simply as a transactional stablecoin but in addition as a passive revenue instrument instantly contesting the attraction of interest-bearing belongings such tokenized treasury merchandise and decentralized finance protocols.

Sooner or later later, on April 24, PayPal introduced a strategic alliance with Coinbase, one of many largest U.S. bitcoin exchanges.  The cooperation intends to extend PYUSD’s use instances and embrace the asset into Coinbase’s infrastructure.

Alex Chriss, President and CEO of PayPal, said:

“We’re excited to drive new, thrilling, and modern use instances along with Coinbase and your complete cryptocurrency group, placing PYUSD on the heart.”

Robust Earnings Bolster PayPal’s Crypto Push

Robust Q1 2025 earnings coincided with the conclusion of the SEC probe. Reporting earnings of $1.33 per share, PayPal exceeded Wall Avenue estimates by a lot exceeding analyst projections of $1.16. The enterprise additionally reported $7.8 billion in gross sales, a 1% rise year-over-year.

Other than good funds, PayPal underlined notable share buyback exercise, therefore indicating religion in its long-term enlargement plan.

What’s Subsequent for PYUSD?

The approaching months will probably be important in figuring out whether or not PYUSD can construct on current good points and evolve from a fringe stablecoin to a severe contender. Whereas the SEC’s resolution removes a serious hurdle, person belief, utility, and platform adoption will finally outline PYUSD’s future.

PayPal’s strikes counsel a transparent roadmap: regulatory compliance, improved utility, and aggressive incentives. Nonetheless, the market stays cautious. Even with a lift in circulating provide and strategic assist from Coinbase, attaining important adoption might require additional innovation—or a serious shift in person habits.

Because it stands, PYUSD is now free from regulatory overhang, however its journey within the crypto financial system has solely simply begun.