The U.S. Securities and Exchange Commission (SEC) is closing its inquiry into the dollar-backed crypto asset issued by the payments giant PayPal.

In August 2023, PayPal introduced the PayPal USD (PYUSD) stablecoin to capitalize on the potential of Web3 payments.

The asset is backed by US dollar deposits, short-term US Treasuries and similar cash equivalents.

By November, PayPal issued a statement saying that the securities regulator was investigating PYUSD and had subpoenaed documents relating to the asset. The company also expressed concern over the regulatory uncertainty surrounding stablecoins.

Nearly two years after receiving the subpoena, PayPal says that the securities watchdog will no longer pursue the inquiry. In a Form 10-Q submitted to the SEC on April 29th, PayPal says the regulator is not taking legal action.

“In November 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requested the production of documents. In February 2025, the SEC communicated it was closing this inquiry without enforcement action.”

The development comes amid reports that PayPal is planning to offer rewards to PYUSD users to boost adoption of the stablecoin.

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