The U.S. Securities and Exchange Commission (SEC) has ended its investigation into PayPal’s (PYPL) dollar-backed stablecoin called PayPal USD.
The year long investigation has concluded without the Wall Street regulator taking any enforcement actions against PayPal, the company said. The decision marks the latest move by the SEC to drop investigations and lawsuits against various cryptocurrency companies.
Since U.S. President Donald Trump returned to the White House, the regulator has informed more than a dozen crypto firms that it would drop investigations against them. Stablecoins, which are cryptocurrencies pegged to the U.S. dollar or price of gold, have become a focal point in the debate over how digital assets should be regulated. Lawmakers and regulators in the U.S. have questioned whether stablecoins resemble securities such as stocks or are more like money market funds.
For PayPal, the end of the SEC’s probe removes a key regulatory overhang as it continues to push deeper into blockchain-based payments and crypto. The company launched its branded stablecoin on the Ethereum (ETH) network in 2023 as a dollar-pegged stablecoin backed by short-term U.S. Treasury bills. PayPal has said that its stablecoin is designed for use in peer-to-peer payments, commerce, and decentralized applications.
Stablecoins are becoming a hot trend in the crypto sector, with companies such as Mastercard (MA), Visa (V), and Dutch bank ING each joining the stablecoin industry. PayPal recently announced plans to start offering American customers a 3.7% yield on balances of its stablecoin.
PYPL stock has fallen 22% this year.