Line a 12-serving cupcake pan with paper liners. Set aside.
Add the peanut butter and 1/4 cup powdered sugar to a large mixing bowl and mix well using an electric hand mixer.
Add the remaining 1/4 cup of powdered sugar if the mixture is too wet - it should feel like a very soft dough. Set aside.
Add the chocolate chips and coconut oil to a microwave-safe bowl and microwave in 30-second increments until the chocolate is fully melted, stirring well after each addition. This should take 1 1/2 - 2 minutes.
Using a small spoon, drop 1-2 tablespoons of the chocolate into the bottom of each cupcake liner and press it slightly up the sides to create a little “cup”.
Place the chocolate cups into the freezer to set for about 10 minutes.
Remove the hardened cups from the freezer and press a tablespoon of the peanut butter mixture into the bottom of each cup, leaving a small gap around the sides to allow the top layer of chocolate to coat the sides.
Press 4-5 M&M candies into each peanut butter cup.
Top each cup with more chocolate until fully coated, reserving a small amount for drizzling later.
Place the peanut butter cups back into the freezer to set for about 20 minutes.
Remove the peanut butter cups from the freezer and peel the liners off.
Drizzle the peanut butter cups lightly with the remaining melted chocolate, and top with Easter sprinkles and/or jimmies.
Serve cold or at room temperature!
Store any leftover peanut butter cups in the refrigerator.