Coin columns · Ethereum City (Capital)
PayPal USD (PYUSD): A Payments Giant’s Dollar Stablecoin
Issued by Paxos, usable inside the PayPal and Venmo apps
PYUSD is a dollar stablecoin that the US payments company PayPal introduced in August 2023. Paxos, a regulated trust company, issues it and manages the reserves so that each PYUSD can be redeemed for one dollar.
1. Who makes it and who issues it
Announced on August 7, 2023, PYUSD was the first dollar stablecoin from a major traditional payments company. PayPal, the online payments company that began in 1998, designs it and distributes it through PayPal and its Venmo app but does not issue it; Paxos Trust Company, long supervised by the New York Department of Financial Services (NYDFS), does.
Paxos also issues the gold token PAXG and the dollar coin USDP, and in December 2025 it won conditional approval from the Office of the Comptroller of the Currency (OCC) to become a national trust bank. On the Crypto Nation map, PYUSD stands in Ethereum City (the capital), because it was first issued on Ethereum.
2. Reserves, minting and redemption
Reserves consist of US dollar deposits, short-term US Treasuries, Treasury-backed repurchase agreements (repos) and cash equivalents. Paxos publishes a monthly reserve report, and an outside accounting firm issues attestations confirming the reserves on a given date.
PayPal and Venmo users can buy and sell PYUSD for dollars inside the apps, while institutions mint and redeem directly through Paxos. From April 2025 PayPal ran a rewards program for US users holding PYUSD, which it describes as platform rewards rather than interest paid by the issuer.
3. Where it is used
PYUSD started on Ethereum, expanded to Solana in May 2024 and later became usable on Arbitrum, Stellar and other chains, letting users pick the chain that suits each use. On Solana, Paxos issues it natively for fast, low-fee payments and transfers.
PayPal is building PYUSD into its own services, including cross-border transfers, merchant checkout and creator payouts. In 2025 it launched “Pay with Crypto”, letting US merchants accept many coins and receive settlement, and in DeFi PYUSD is used for lending and for supplying liquidity to trading pools.
4. Things to know
On October 15, 2025, Paxos mistakenly minted 300 trillion PYUSD through a technical error and burned it within 30 minutes. It said there was no hack and customer funds were safe, but the episode showed how an issuer’s operational slip lands straight on the ledger. In 2023 a NYDFS order also made Paxos stop minting BUSD, the Binance-branded stablecoin.
As a fiat-backed coin, PYUSD can be frozen at specific addresses by its issuer, a power used against crime that also means users must trust the issuer, and it depends on banks, the Treasury market and regulators. The GENIUS Act bars issuers from paying holders interest, and how far affiliate rewards like PayPal’s may go became a question in the 2026 rulemaking.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.