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Payments giant PayPal said it received a subpoena from the U.S. Securities and Exchange Commission (SEC) that requested documents related to its PayPal USD stablecoin (PYUSD).
It revealed the information in its Q3 financial report that was filed on Nov. 2, and said it is “cooperating with the SEC in connection with this request.”
BREAKING:🇺🇸 PAYPAL RECEIVED A SUBPOENA FROM U.S. #SEC ON NOVEMBER 1ST RELATING TO PAYPAL USD STABLECOIN – REUTERS #BITCOIN #CRYPTO pic.twitter.com/5KxLWQ8h0x
— Crypto Macro (@cryptomacro14) November 2, 2023
The SEC’s action is likely to raise renewed concerns about its crackdown on the crypto industry at a time when other countries appear to be eager to foster the development of stablecoins. Stablecoins are regarded as a more useful form of cryptocurrency for the exchange of value than most other volatile crypto tokens.
Paypal launched PYUSD in August, becoming the first major fintech company to float a stablecoin, and promised to offer new use-cases.
The stablecoin is issued by Paxos Trust Company and backed by U.S. dollar deposits, short-term treasuries and similar cash equivalents.
PYUSD is built atop the Ethereum blockchain and was initially offered to online payment customers before expanding to the company’s Venmo app. It is aimed at handling digital payments and Web3.
Paypal first dipped its feet into the murky waters of the crypto industry in 2020 when it allowed its customers to buy, hold and sell digital currencies.
In 2021, it expanded the same service to Venmo. In 2022, the global payments company expanded the service allowing its users to crypto to third-party wallets, expanding the capacity to Venmo in April this year.
The Rise and Rise of PayPal USD
PYUSD has been successful since its launch, reaching a $150 million market capitalization within two months.
PYUSD’s market cap stands at about $159.6 million, with almost $2.85 million in daily trading volume, according to data from CoinMarketCap.
PYUSD Metrics
PYUSD was listed on major exchanges such as U.S.-based Coinbase and Kraken crypto exchanges as well as Crypto.com and Bitstamp soon after its launch.
It was hailed as a significant entrant by a TradFi company amid talks of renewed institutional appetite sparked by several applications for a spot Bitcoin ETF.
In September, the company announced the upcoming integration of the PayPal USD stablecoin into the Venmo mobile payment service, allowing users to purchase PYUSD and send it to third parties.
In addition to aggressively growing in the U.S., PayPal obtained a license from the UK’s Financial Conduct Authority (FCA) to offer crypto-related services in the UK.
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