PayPal Faces SEC Subpoena for PYUSD Stablecoin
In its Q3 report, PayPal revealed that it received a subpoena from the US Securities and Exchange Commission (SEC) relating to its stablecoin, PayPal USD (PYUSD). Despite this, PayPal shares rose by 7% on Thursday.
PayPal Cooperating with SEC
The SEC’s enforcement division issued a subpoena to PayPal regarding its US dollar-pegged stablecoin, PYUSD. In response, PayPal stated that it was cooperating with the securities agency. PYUSD was launched on the Ethereum blockchain in August and is backed by US dollar deposits and short-term Treasuries.
Bank of America Skeptical of PYUSD Adoption
The Bank of America expressed doubt about the widespread adoption of PYUSD due to intense competition from central bank digital currencies (CBDCs) and yield-bearing stablecoins. The bank believes that PYUSD will face additional headwinds in the long term.
Shares Rise Despite Subpoena
Despite the SEC subpoena, PayPal’s shares increased by almost 7% after the company reported a strong full-year profit forecast. This boosted market confidence and allayed concerns over a spending slowdown.
PayPal’s Expansion into Crypto Space
PayPal has made several strategic moves into the cryptocurrency industry. It launched an off-ramp service allowing users to convert their crypto into US dollars. Additionally, PayPal obtained a crypto license from the UK Financial Conduct Authority. However, concerns remain over the FCA’s strict regulations.
Hot Take: PayPal Faces SEC Scrutiny but Sees Share Price Surge
Despite being served with a subpoena from the SEC regarding its stablecoin, PYUSD, PayPal’s shares rose by 7%. The company’s strong Q3 performance and full-year profit forecast boosted investor confidence. However, the Bank of America remains skeptical about the widespread adoption of PYUSD due to competition from CBDCs and yield-bearing stablecoins. PayPal continues to expand its presence in the crypto industry with services such as an off-ramp for converting crypto into fiat currency and obtaining a crypto license from the FCA. The future of PYUSD and PayPal’s involvement in cryptocurrencies remains uncertain but promising.
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