PayPal USD (PYUSD)

What PayPal USD is

PayPal USD (PYUSD) is a US dollar stablecoin issued by Paxos and distributed through PayPal. One token is intended to be worth one US dollar and is redeemable one-for-one with the issuer. PayPal announced it on August 7, 2023 (source: PayPal newsroom). It is an ordinary blockchain token, so it can leave PayPal entirely and sit in a self-custodied wallet.

PayPal is a payments company, not a bank, and says so on its own PYUSD page. The reserves, the redemption promise, and the regulatory license all sit with Paxos rather than with PayPal. PayPal supplies the brand, the consumer app, and the on-ramp; Paxos supplies the balance sheet. Keeping that division straight matters, because the party you would ultimately claim against is the issuer.

How it works

PYUSD is a claim on a pool of reserve assets held by the issuer. When someone buys PYUSD from Paxos, dollars go into reserve and new tokens are minted. When someone redeems, tokens are destroyed and dollars come back out. Paxos describes reserves as held "100% in US dollar deposits, US treasuries and cash equivalents," with "1:1 redemption, readily available" (source: Paxos PYUSD page, September 2026). Customer assets are described as sitting in segregated, bankruptcy-remote accounts.

As of September 2026, Paxos describes the issuing entity as Paxos Trust Company, N.A., a national trust bank supervised by the Office of the Comptroller of the Currency (source: Paxos, September 2026). At launch in 2023 the issuer was a New York State Department of Financial Services-regulated trust company (source: PayPal newsroom, August 2023). The supervisory arrangement is one of the details most worth re-checking rather than assuming, since it has already changed once.

Paxos publishes monthly attestation reports on reserve composition, prepared by an independent third-party accounting firm, alongside its own monthly self-reporting. Those reports are the closest thing PYUSD has to proof of reserves, and they are point-in-time statements rather than continuous verification.

PYUSD runs on Ethereum and Solana. On Ethereum it is a standard fungible token; on Solana, Paxos uses the Token-2022 program, which allows compliance controls such as a permanent delegate to be enforced at the token level rather than through a wrapper contract (source: Paxos engineering blog, June 2026). In practice that means the issuer retains the ability to freeze or seize tokens under legal process. That capability is a feature for regulators and a risk for holders, depending on your point of view.

Inside PayPal, buying and selling PYUSD against US dollars is handled by PayPal's own crypto service. On-chain, PYUSD behaves like any other stablecoin: transfers cost gas on Ethereum or a fraction of a cent on Solana, and settlement is final once the transaction has enough confirmations.

Supply and tokenomics

PYUSD has no fixed supply and no issuance schedule. Supply expands and contracts with demand: it grows when buyers deposit dollars with Paxos and shrinks when holders redeem. There is no burn mechanism tied to network activity, no staking yield paid by the protocol, and no governance token attached to it.

Holders of PYUSD do not receive interest on the reserves. Whatever yield the underlying Treasuries and deposits generate accrues to the issuer and its distribution partners, not to the person holding the token. This is the standard arrangement for payment stablecoins and is the main structural difference between PYUSD and tokenized money-market products such as Ondo US Dollar Yield, which pass yield through but restrict who may hold them.

Because the token exists on more than one chain, the circulating supply figure you see is the sum across chains. Moving PYUSD between Ethereum and Solana does not change total supply; it burns on one side and mints on the other.

History

PayPal announced PYUSD on August 7, 2023, launching it as an ERC-20 token on Ethereum issued by Paxos Trust Company. Dan Schulman, then PayPal's president and chief executive, framed it as an instrument that is "both digitally native and easily connected to fiat currency like the U.S. dollar" (source: PayPal newsroom, August 2023). It was the first dollar stablecoin issued under a major consumer payments brand in the United States.

Paxos later extended PYUSD to Solana, using the Token-2022 standard it also applied to Global Dollar and, in June 2026, to Pax Gold. Paxos itself moved from a New York trust charter toward a national trust bank charter supervised by the Office of the Comptroller of the Currency, a change reflected across its product pages by 2026.

Risks and what to watch

The central risk is issuer risk. PYUSD is a liability of Paxos, not a deposit at a bank, and it is not insured the way a bank deposit is. If the reserve assets fell in value, if redemption were suspended, or if the issuer faced insolvency, holders would depend on the segregation and bankruptcy-remoteness of the reserve accounts working as described. Those protections are contractual and legal, not automatic.

The second risk is control. Because Paxos can enforce compliance actions at the token level on both chains, individual balances can be frozen. That is a design decision, not a defect, but it means PYUSD is not censorship-resistant in the way bitcoin is.

Third, regulation is still moving. Stablecoin rules in the United States have changed materially since 2023, and Paxos's own charter has changed with them. Reserve composition requirements, permitted issuers, and disclosure obligations can all shift, so treat any specific regulatory description, including the ones on this page, as dated rather than permanent.

Finally, watch depeg behavior in thin markets. A stablecoin's price on a given venue reflects that venue's liquidity and spread, not the redemption value at the issuer. Small deviations on smaller exchanges are common and usually mean nothing about the reserves.

Frequently asked questions

Who actually issues PayPal USD?

Paxos issues and custodies PYUSD. PayPal markets it and distributes it through its consumer apps. If you redeem PYUSD for dollars at par, the counterparty performing that redemption is Paxos, not PayPal.

Which blockchains does PYUSD run on?

Ethereum and Solana, as of September 2026 (source: Paxos PYUSD page). The same token exists on both; the supply is shared, and moving between chains does not create new tokens.

Does holding PYUSD pay interest?

No. Reserve income goes to the issuer and its partners. If you want a dollar-denominated on-chain asset that passes through yield, you are looking at a different product category with different eligibility rules and different risks.

Can PYUSD be frozen?

Yes. The token contracts on both chains include compliance controls that let the issuer freeze or seize balances under legal process. This applies regardless of whether you hold the token in PayPal or in self custody.

Where can I buy PayPal USD?

PYUSD is available through PayPal's own apps and on a range of centralized exchanges. See where to buy PayPal USD for the current list by jurisdiction, and Exchanges for details on each venue.