PayPal Receives SEC Subpoena for Documents Related to PYUSD Stablecoin
Payments giant PayPal has confirmed that it received a subpoena from the U.S. Securities and Exchange Commission (SEC) requesting documents related to its PayPal USD stablecoin (PYUSD). The company disclosed this information in its Q3 financial report filed on November 2nd and stated that it is cooperating with the SEC in connection with the request.
SEC’s Action Raises Concerns Amidst Growing Interest in Stablecoins
The SEC’s subpoena is likely to raise concerns about its crackdown on the crypto industry, especially as other countries are fostering the development of stablecoins. Stablecoins, such as PYUSD, are considered a more reliable form of cryptocurrency due to their stable value.
About PayPal’s PYUSD Stablecoin
In August, PayPal became the first major fintech company to launch a stablecoin with the introduction of PYUSD. The stablecoin is issued by Paxos Trust Company and backed by U.S. dollar deposits, short-term treasuries, and similar cash equivalents. It is built on the Ethereum blockchain and was initially offered to online payment customers before expanding to Venmo.
PayPal’s Expansion into Crypto
PayPal ventured into the crypto industry in 2020 by allowing its customers to buy, hold, and sell digital currencies. It expanded this service to Venmo in 2021 and later enabled users to transfer crypto to third-party wallets. The company obtained a license from the UK’s Financial Conduct Authority (FCA) to offer crypto-related services in the UK.
The Rise of PYUSD
PYUSD has experienced significant success since its launch, reaching a market capitalization of $150 million within two months. Currently, it has a market cap of approximately $159.6 million and a daily trading volume of nearly $2.85 million. PYUSD is listed on major exchanges such as Coinbase, Kraken, Crypto.com, and Bitstamp.
Hot Take: PayPal Faces SEC Scrutiny Amidst Stablecoin Growth
The recent subpoena from the SEC regarding PayPal’s PYUSD stablecoin raises concerns about regulatory crackdowns on the crypto industry. While stablecoins gain momentum globally, with countries fostering their development, PayPal’s cooperation with the SEC highlights potential challenges for stablecoin issuers and users alike.
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