The United States Securities and Exchange Commission (SEC) has filed a subpoena to PayPal, requesting more details about its PYUSD stablecoin. Today, the popular financial firm confirmed through a blog post that it received a subpoena from the regulator.
In the disclosure, PayPal didn’t provide more details about the subpoena. However, the financial service provider disclosed that it is cooperating with the SEC to provide details about its PYUSD stablecoin. Meanwhile, the recent development underlines how the SEC of late has shifted more attention to stablecoins.
There are growing concerns among regulators in the United States about stablecoins belonging to big tech companies. More so, some regulators have argued that stablecoins relating to renowned tech companies will attract vast adoption. Enjoying such massive attention according to the regulators could disrupt the United States financial markets.
How PayPal Journeyed Into the Crypto Markets
Recall that on August 6, 2023, PayPal announced the launching of its Ethereum-based stablecoin, PYUSD. At first, the payment merchant availed the token to its customers before extending it to users of the firm’s Venmo application. The launching of the stablecoin emanated from the company’s embracement of crypto.
Furthermore, PayPal began allowing its customers to buy and sell crypto assets in 2020. Ever since the paymaster has gone from strength to strength as it added crypto services to its Venmo app a year later. Thereafter, PayPal in 2022, added a feature that allows users to send their cryptocurrency to external wallets.
Meanwhile, in February 2023, the payment merchant halted the development of its stablecoin, citing regulatory concerns. Two months later, the company equipped Venmo with capabilities to allow users to transfer their assets to external wallets. With the launching of its stablecoin, PayPal became one of the tech heavyweights finding its feet in the virtual assets industry.
Recent Crackdown on Crypto
Lately, the SEC has maintained somewhat of a stern approach to the stablecoin sector. The regulator recently attempted to bring the foremost stablecoins into regulatory compliance. Before PayPal launched its stablecoin, the SEC attempted to sue Paxos over the minting of BUSD.
Then, the regulator cited regulatory concerns about the stablecoin which was the third-largest behind USDC and USDT. Eventually, the New York Department of Financial Services (NYDFS) ordered Paxos to stop minting the BUSD. Thereafter, the United States SEC has gone after Coinbase and Binance, questioning their compliance with its regulatory stipulations.