SEC Closes PYUSD Probe Without Action as Circulating Supply Jumps 75%

PayPal’s Ethereum-Based Stablecoin Avoids Scrutiny Amid Growing Market Footprint

After more than a year under regulatory review, the U.S. Securities and Exchange Commission has officially closed its investigation into PayPal USD (PYUSD), taking no enforcement action. The conclusion of the probe, which began in November 2023 with a subpoena seeking documentation about the stablecoin, was disclosed in a February regulatory filing by PayPal. The closure removes a cloud of uncertainty surrounding the stablecoin, which is issued by Paxos Trust and fully backed by short-term U.S. Treasuries, cash equivalents, and dollar deposits.

Launched on the Ethereum blockchain, PYUSD has quietly gained traction in 2025, with its circulating supply surging by 75% since the start of the year. Its market capitalization now hovers around $880 million, reflecting growing adoption across exchanges and crypto wallets. The asset’s growth comes at a time when lawmakers are actively shaping the future of the stablecoin market through new legislation. Both the STABLE Act and GENIUS Act are moving forward in Congress, aiming to build a clearer framework for regulating fiat-backed digital assets. These efforts signal a changing tone from regulators under the Trump-era SEC, suggesting a shift toward formalized guidance rather than punitive enforcement.

PayPal’s stablecoin expansion strategy has also been bolstered by a strategic partnership with Coinbase, allowing U.S. users to earn a 3.7% annual yield by holding PYUSD on the platform. The collaboration not only improves user incentives but also positions PYUSD more prominently on the crypto price index and within broader crypto price tracking tools. As stablecoins play an increasingly critical role in the digital asset economy, PYUSD’s strengthened coin market cap and growing circulation may mark the beginning of a more sustained institutional presence in the space.

This article has been refined and enhanced by ChatGPT.