PayPal USD

PayPal USD (PYUSD) is a US dollar stablecoin issued by Paxos Trust Company on behalf of PayPal. Each token is designed to hold a value of one US dollar and is fully backed by dollar deposits, short-term US Treasuries, and similar cash equivalents. Holders can redeem PYUSD 1:1 for US dollars through PayPal, making it a bridge between the traditional payments giant's user base and public blockchains.

PayPal launched PYUSD in August 2023, making it the first stablecoin issued by a major US financial technology company. The token was initially released on Ethereum as an ERC-20 token and later expanded to Solana and other networks, reflecting a multi-chain strategy aimed at cheaper and faster payments.

How it works

PYUSD is a fiat-backed stablecoin rather than a mined or staked cryptocurrency. Paxos issues new tokens when customers deposit dollars and burns tokens when they redeem, so the supply expands and contracts with demand — there is no fixed maximum supply. Paxos, a regulated trust company under the New York State Department of Financial Services, holds the reserves and publishes regular attestation reports on their composition.

Role in the ecosystem

PYUSD is positioned primarily as a payments asset. Within PayPal and Venmo, users can buy, sell, hold, and transfer it, and it can be moved on-chain to external wallets. In decentralized finance it functions like other major USD stablecoins: a stable unit for trading pairs, transfers, and settlement across the ecosystems where it is deployed, including Ethereum, Solana, and several Layer 2 networks.