In a recent report by Reuters, online payment system company PayPal announced plans to bolster its market value by $4 billion, seeking to streamline operations to appease investors. However, investor optimism was tempered by disclosing a subpoena from the US Securities and Exchange Commission (SEC) related to PayPal’s stablecoin PYUSD.

PayPal’s $4 Billion Value Boost Amidst SEC Subpoena

Before market opening on Thursday, PayPal’s shares surged by 7% to reach $55.16, fueled by a full-year profit forecast that assuaged concerns of a spending slowdown. 

The company’s new CEO, Alex Chriss, acknowledged the need for cost reduction, stating, “Simply put, our cost base remains too high.” Chriss emphasized aligning resources with the most profitable growth priorities in their strategic realignment.

Per the report, the positive forecast reflects consumers’ “resilient” financial health, enabling them to sustain their spending habits despite lingering economic uncertainties. 

Analysts, including Tien-tsin Huang from J.P. Morgan, praised Chriss’ remarks, citing his “insightful assessment” of the company’s challenges and a solid framework for improving growth and profitability. William Blair, a leading brokerage firm, also expressed encouragement regarding PayPal’s narrowed focus on profitable growth.

While PayPal’s market value expansion was well-received, the disclosed SEC subpoena signifies continued regulatory scrutiny in the cryptocurrency industry. 

Despite a recent high-profile court loss against Grayscale Investments, the SEC’s Enforcement Division sent the subpoena to PayPal, requesting document production. 

Notably, PayPal made history as the first major financial technology firm to embrace digital currencies for payments and transfers when it launched its dollar-backed stablecoin in August. 

Acknowledging the SEC’s scrutiny, PayPal reiterated its cooperation with the subpoena, according to the report.

PYUSD Stablecoin Gains Traction 

According to data from CoinMarketCap, PayPal’s PYUSD stablecoin has garnered significant attention in the digital currency space, boasting a notable market cap and significant trading volume. 

With a market cap of approximately $158,763,822, PYUSD currently ranks 240th among digital assets. Furthermore, PYUSD has experienced a 24-hour trading volume of $2,847,923, ranking it at 482nd. 

The volume-to-market cap ratio, a key metric that measures the liquidity and relative trading activity of an asset, stands at 1.80% for PYUSD. This figure highlights the notable trading activity surrounding the stablecoin, with a significant portion of its market cap being actively traded within 24 hours. 

PYUSD’s circulating supply currently stands at 158,956,937 tokens. This signifies the number of stablecoins in circulation and utilized for various transactions and financial activities. 

The total supply of PYUSD also aligns with the circulating supply, indicating that there are no additional tokens planned for issuance beyond the current amount. This fixed supply ensures stability and predictability for PYUSD users and investors.

All around, despite the SEC’s subpoena, PYUSD has emerged as a significant player in the stablecoin ecosystem. The unfolding situation and potential further actions by the SEC against PayPal’s PYUSD stablecoin, along with their potential implications for the company’s operations, are yet to be determined.

Featured image from Shutterstock, chart from TradingView.com