Once more, PayPal Holdings, a major participant in the payment industry, has been subject to regulatory scrutiny. Regarding its U.S. dollar stablecoin, this time. The organization, which garnered considerable interest as the initial prominent fintech company to adopt digital currencies, was formally served with a subpoena by the Securities and Exchange Commission (SEC) of the United States.
On November 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD stablecoin. The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request.PayPal revealed in its quarterly earnings report filed Wednesday
The initial stablecoin developed by a significant financial services firm was PayPal’s. The declaration incited apprehension in Washington due to its resemblance to the Libra stablecoin, an earlier endeavor by Facebook (now Meta Platforms) that failed to materialize. Certain U.S. regulators are concerned that a token associated with a significant technology platform could rapidly gain widespread adoption and pose a risk to the financial stability of the country.
Approximately three months after PayPal introduced its PYUSD stablecoin in early August, this event transpired. Paxos Trust issues the stablecoin, which is supported by cash equivalents such as U.S. dollar deposits and short-term Treasury bills. The Ethereum blockchain underpins PYUSD, which is designed to facilitate digital payments and Web3.
The stablecoin was swiftly listed on platforms of major exchanges including Coinbase, Crypto.com, Bitstamp, and Kraken shortly after its inception, which contributed to the steep increase in PayPal USD adoption. PayPal declared its intention to incorporate the PYUSD stablecoin into the Venmo mobile payment platform in September. This integration would enable users to acquire PYUSD and subsequently transfer it to their loved ones.