PayPal’s Stablecoin (PYUSD) Effort Encountered Subpoena from SEC

According to Bloomberg, PayPal Holdings (PYPL) received a subpoena from the U.S. Securities and Exchange Commission’s division of enforcement related to its work on a dollar-linked stablecoin.

The motion requested PayPal to provide more information linked to its in-house stablecoin project. Reportedly, the payment company is already cooperating with the probe.

PayPal first announced its upcoming stablecoin effort in August. The token was known as PayPal USD (PYUSD), since then. It is pegged to USD and is said to be fully backed by U.S. dollar deposits, short-term Treasuries and cash equivalents.

This significant development follows PayPal’s sensational move in August, when the fintech giant became the first in its field to tap into digital currencies for payments and transfers. According to Cryptoslate.com, despite successfully registering with the United Kingdom’s Financial Conduct Authority (FCA) to offer crypto services there, elsewhere PayPal faced several restrictions in its crypto activities.

Now the digital giant is prohibited from allowing new customers to buy new crypto assets, expanding its current offering in crypto assets, and operating an automated process to exchange crypto assets for money without the FCA’s approval.The coin is now enjoying a market capitalization of about $158 million.