SEC Subpoenas PayPal Over Its USD-Pegged Stablecoin Launch

PayPal’s recent move into the stablecoin market, involving the launch of its dollar-pegged stablecoin PYUSD, draws regulatory scrutiny amid a broader clampdown on digital currencies by U.S. authorities.

PayPal has received a subpoena from the Securities and Exchange Commission (SEC) regarding its dollar-pegged stablecoin, PYUSD, which was introduced in August and made available on Venmo in September.
The stablecoin, PYUSD, is issued by Paxos Trust Company and is backed by U.S. dollar deposits.
PayPal is the first major U.S. financial institution to launch stablecoins for payments and transfers, prompting concerns within the stablecoin space in the U.S.
Despite the notice from the SEC, PayPal's shares climbed 7% due to a strong full-year profit forecast, adding $4 billion to its market value.
Other regions such as Hong Kong and the European Union are fostering the development of stablecoins with regulatory frameworks expected by 2024, while the U.S. continues to scrutinize involvement with digital currencies.