SEC takes legal action against PayPal

US payment service provider PayPal has received a subpoena from the SEC regarding its own stablecoin PYUSD.

After payment service provider PayPal stormed the market in August with its stablecoin PYUSD, the company has now received a subpoena from the U.S. Securities and Exchange Commission (SEC).

The company announced this in its quarterly report published Nov. 1: "On Nov. 1, 2023, we received a subpoena from the U.S. SEC Division of Enforcement regarding PayPal USD Stablecoin'' it reads. "The subpoena requests the production of documents. We are cooperating with the SEC in connection with this request."

The reason for the subpoena is likely concern from U.S. regulators, who fear such a financial product from a tech giant like PayPal because of its huge adoption potential - and thus the integrity of the U.S. dollar as a national currency, said Coindesk.

A few months ago warned investment bank Berenberg for an SEC move against stablecoins.

However, the payments giant already added cryptocurrencies to its range in the U.S. in 2020. Since 2022, US users can also transfer their cryptocurrencies purchased from PayPal to third-party wallets.

In the UK, PayPal only this week, on Nov. 1, received the green light from the Financial Conduct Authority (FCA) to resume its crypto operations there after services were paused in October to comply with stricter rules for crypto providers in the UK.