--- title: "PayPal (PYUSD)" author: Mariusz Szyma date: 2026-09-24 lang: en canonical: https://szyma.co/en/blog/companies/paypal/ series: "Companies in stablecoins and RWA" series_part: 24/26 series_url: https://szyma.co/en/blog/companies/ data_as_of: Sep 2026 --- # PayPal (PYUSD) PayPal is the first large US payments company to put its brand on a stablecoin. PYUSD, issued for it by Paxos, gives PayPal and Venmo users a dollar token they can send, spend and use on blockchains, and it shows what a stablecoin looks like when a large consumer payments network is behind it. ## At a glance | | | |---|---| | Founded | PayPal 1998; PYUSD launched on 7 August 2023 | | Headquarters | San Jose, California, United States | | Layer | Distributor and brand; the issuer is [Paxos](/en/blog/companies/paxos/) | | Key products | PYUSD inside PayPal and Venmo, PYUSD on public chains, PYUSDx framework for app-specific tokens | | Scale | About 2.7 bn USD of PYUSD in circulation (DefiLlama, 24 September 2026) | | Competes with | [Circle](/en/blog/companies/circle/) (USDC), [Tether](/en/blog/companies/tether/), USDG, bank tokens | ## What it does PayPal does not hold the reserve. Paxos Trust Company, under federal OCC supervision since it converted to a national trust charter on 12 December 2025, mints PYUSD, keeps the reserve in dollar deposits, Treasuries and cash equivalents, and redeems it 1:1. PayPal owns the customer relationship: users buy, hold and send PYUSD inside the PayPal and Venmo apps, and PayPal says converting PYUSD to dollars there costs nothing. **A holder reward** is the way PYUSD pays users without the issuer paying interest. The GENIUS Act bars a payment-stablecoin issuer from paying yield, so Paxos pays nothing. PayPal, as the distributor, funds a reward from its own pocket, much like a card loyalty programme. Whether final US rules will treat all such arrangements as outside the ban is not settled. Outside the app, PYUSD runs on Ethereum, Solana, Arbitrum, Stellar and other chains, and since September 2025 on more networks through LayerZero as "PYUSD0". It sits in DeFi as well: a PYUSD savings vault on Spark launched in December 2025. ## Where PYUSD is used PayPal has pushed PYUSD into payments rather than trading. YouTube began paying some US creators in PYUSD in December 2025. PayPal expanded PYUSD to 70 markets, including Colombia, Peru and Singapore, in March 2026. Mastercard added PYUSD to its stablecoin settlement set in June 2026. In February 2026 MoonPay and M0 launched PYUSDx, a framework that lets other apps issue their own branded tokens backed by PYUSD. Business payments are a second track. In March 2026 Coinbase and Paxos enabled PYUSD and USDC for insurance premium payments at Aon, a use with no PayPal app involved. Supply has been driven partly by incentives. PYUSD peaked at around 4.1 bn USD in the first quarter of 2026 and fell after the rewards campaign ended. ## How it is different USDT and USDC grew on exchanges and in DeFi. PYUSD starts from a consumer payments network and tries to move outward. PayPal also avoided becoming an issuer itself: it rents Paxos's licence, which keeps reserves and redemption off PayPal's balance sheet and limits its regulatory exposure. ## Where it fits [Who's who in stablecoins](/en/blog/stablecoins/whos-who/) explains the split between brand and issuer. [How stablecoin issuers make money](/en/blog/stablecoins/the-business/) covers the yield ban and distributor rewards. [Where stablecoins are actually used](/en/blog/stablecoins/payments/) looks at merchant and payout use. [Which chains stablecoins live on](/en/blog/stablecoins/chains-and-distribution/) covers distribution. Related profiles: [Paxos](/en/blog/companies/paxos/), [Circle](/en/blog/companies/circle/). ## Risks and open questions The brand and the issuer are different companies. If Paxos lost its authority to issue, as happened with BUSD in 2023, PayPal's token would be the one affected, even with a full reserve. Chain spread adds operational risk. Bridged versions such as PYUSD0 depend on the security of the bridge, not only on Paxos, so a holder on a smaller chain carries an extra layer the Ethereum holder does not. Incentive-driven supply may not stick. The fall after the rewards ended suggests part of PYUSD's float was paid for. Regulators have not finished the yield rules. A final interpretation that pulls distributor rewards inside the ban would remove PYUSD's main growth tool. No freeze controversy, outage or enforcement action specific to PYUSD was found in public reporting. ## What to watch next - PYUSD supply without rewards, the cleanest test of organic demand. - Merchant use through Mastercard settlement and PayPal checkout, which is the use case PayPal claims to be building for. - Final GENIUS Act rules on distributor rewards. - Uptake of PYUSDx by other apps. ## Sources - 🟢 DefiLlama, stablecoin dashboard, read 24 September 2026, https://defillama.com/stablecoins - 🟢 PayPal Newsroom, "PayPal Launches U.S. Dollar Stablecoin", 7 August 2023, https://newsroom.paypal-corp.com/2023-08-07-PayPal-Launches-U-S-Dollar-Stablecoin - 🟢 Paxos, PYUSD page (issuer, reserves, redemption), accessed 10 September 2026, https://paxos.com/pyusd/ - 🟢 Paxos, "OCC Approves Paxos Application to Convert to OCC Trust", 12 December 2025, updated with the conversion completed the same day, https://www.paxos.com/newsroom/occ-approves-paxos-application-to-convert-to-occ-trust-paxos-to-complete-conversion-imminently-to-become-a-federally-regulated-blockchain-infrastructure-provider - 🟡 The Block, "PayPal PYUSD expands to more blockchains via LayerZero", 18 September 2025, https://www.theblock.co/news/markets/2025-09-18-paypal-pyusd-stablecoin-expands-blockchains-layerzero-371321 - 🟡 The Block, "MoonPay unveils PYUSDx framework for app-specific stablecoins", 27 February 2026, https://www.theblock.co/news/markets/2026-02-27-moonpay-unveils-pyusdx-framework-app-specific-stablecoins-tied-paypal-usd-391602 - 🟢 US Congress, GENIUS Act (S. 1582), signed 18 July 2025, https://www.congress.gov/bill/119th-congress/senate-bill/1582