PayPal USD

What is PayPal USD?

PayPal USD (PYUSD) is a dollar stablecoin branded by PayPal and issued by Paxos Trust Company, N.A., which has been supervised by the OCC since December 2025. It is backed by dollar deposits, short-term Treasuries and cash equivalents. Eligible PayPal and Venmo users can buy, send and convert it inside those apps.

What it’s used for

Eligible US PayPal and Venmo users hold and send PYUSD and convert it back to dollars in the apps. Payment companies use it for cross-border transfers, and it is used in DeFi on Ethereum, Solana and other networks, including the Stable chain.

Role of the PYUSD token:

Evidence of real use

• PayPal launched PYUSD on August 7, 2023, issued by Paxos and backed by dollar deposits, short-term Treasuries and similar cash equivalents. Source
• Paxos converted its NYDFS trust charter to an OCC national trust charter on December 12, 2025, putting PYUSD issuance under OCC supervision. Source
• In October 2025 Paxos accidentally minted $300 trillion of PYUSD and burned it shortly afterward. Source

How PayPal USD works

Paxos, not PayPal, issues PYUSD. Paxos mints tokens when approved customers deposit dollars and burns them on redemption, and PayPal and Venmo act as distribution channels for consumers. Inside those apps, eligible users can buy PYUSD, send it to other users or external wallets, and convert it back to dollars. Paxos says conversions between PYUSD and dollars with PayPal and Paxos carry no fee.

Reserves are held in US dollar deposits, short-term Treasuries and cash equivalents. Paxos publishes monthly reserve reports and attestations from an independent accountant. In October 2025 an internal error caused Paxos to mint $300 trillion of PYUSD; it was caught and burned quickly and did not reflect a reserve shortfall, but it drew regulatory attention to operational controls. For holders, it was a reminder that a stablecoin's safety depends on the issuer's processes as well as its reserves.

Since December 2025, Paxos Trust Company has been a national trust bank supervised by the OCC, and Paxos describes PYUSD as aligned with the coming GENIUS Act rules. The token runs on several blockchains, including Ethereum and Solana, and was deployed on the Stable chain in December 2025. Like other regulated stablecoins, the issuer can freeze tokens to meet legal obligations.

Key moments

1. 2023PayPal launches PYUSD on Ethereum in August, issued by Paxos.
2. 2024PYUSD expands to Solana.
3. 2025Paxos accidentally mints and then burns $300 trillion of PYUSD in October; in December Paxos converts to an OCC-supervised national trust bank and PYUSD deploys on the Stable chain.
4. 2026Federal regulators propose GENIUS Act implementing rules that will govern issuers like Paxos.

Supply

PYUSD has no supply cap. Paxos mints it when customers deposit dollars and burns it when they redeem. Reserve income goes to the issuer and its partners; holders do not earn it directly.

Risks to understand

• Operational risk: the 2025 minting error showed that issuer controls can fail, even if reserves are intact.
• Platform dependence: much consumer access runs through PayPal and Venmo, whose features and eligibility can change.
• Freeze risk: the issuer can block tokens at specific addresses under its terms.
• Regulatory transition: The GENIUS Act, signed in July 2025, is expected to take effect on January 18, 2027. As of October 2026, Treasury, the OCC and the Federal Reserve had published proposed implementing rules, but final rules were still pending.

Last reviewed October 4, 2026 by The Crypto Guide editorial team. Utility Lens ratings are editorial judgments, not investment advice. Market data from CoinGecko. Spot an error? Request a correction.