What Is PYUSD? PayPal USD Stablecoin Explained

PYUSD (PayPal USD) is a US dollar stablecoin launched by PayPal in August 2023 and issued by Paxos Trust Company, N.A. It is designed to stay at $1, is backed by US dollar deposits, US Treasuries and similar cash equivalents, and can be bought and sold 1:1 for dollars in the PayPal and Venmo apps. As of 9 October 2026 about $2.9 billion of PYUSD was in circulation, making it the eighth-largest dollar-pegged token tracked by DefiLlama.

This guide explains who stands behind PYUSD, how it is backed and checked, where it lives on-chain, how PayPal's PYUSD rewards work, how to get it, and the risks to understand before holding it.

What is PYUSD?

PYUSD is a fiat-backed stablecoin: every token is meant to be matched by at least one dollar of reserve assets and redeemable for one US dollar. PayPal announced it on 7 August 2023 as a stablecoin "designed to contribute to the opportunity stablecoins offer for payments", launching first as an ERC-20 token on Ethereum for eligible US customers.

The split of roles matters. PayPal is the brand and distributor: it decides how PYUSD appears in its apps and runs the rewards program. Paxos is the issuer: it mints and burns tokens, holds the reserves and publishes the reports. That makes PYUSD similar in structure to USDC or USD1, and very different from crypto-collateralized or synthetic dollars like Ethena's USDe.

Who issues PYUSD: Paxos and its OCC charter

When PYUSD launched, Paxos Trust Company was a New York limited purpose trust company supervised by the New York State Department of Financial Services (NYDFS). On 12 December 2025 the US Office of the Comptroller of the Currency (OCC) conditionally approved Paxos's application to convert into a national trust bank, Paxos Trust Company, National Association, in the same announcement as charters for Ripple, Circle, BitGo and Fidelity Digital Assets.

Paxos's regulatory record page now describes Paxos Trust Company, N.A. as "a U.S. national trust bank regulated by the OCC", and its PYUSD page says the issuance of PYUSD and its reserves are subject to OCC oversight. PayPal itself holds a New York BitLicense, which it received in June 2022, according to its launch announcement.

PYUSD reserves and attestations

According to Paxos, PYUSD reserves are held 100% in US dollar deposits, US Treasuries and cash equivalents, in segregated, bankruptcy-remote accounts, so that customer assets would not be used to pay Paxos's debts if Paxos became insolvent.

Paxos publishes two documents each month on its PYUSD transparency page:

A reserve report, self-reported five business days after month end, showing portfolio composition. Paxos notes these are not independently reviewed.
An attestation report by an independent accounting firm. Reports posted on or after 28 February 2025 are by KPMG LLP; earlier ones were by WithumSmith+Brown. Both work under AICPA attestation standards.

As of 9 October 2026, the page listed 2026 attestations from January through August. An attestation is a point-in-time check that reserves cover tokens outstanding, not a full audit of the issuer, which is standard across the industry. Our guide to stablecoin depegs explains why reserve quality and redemption access both matter.

How big is PYUSD and which chains is it on?

Per DefiLlama's PYUSD data, circulating supply was about $0.5 billion on 1 January 2025, $2.4 billion on 1 October 2025 and $3.6 billion on 1 January 2026. It peaked at about $4.2 billion on 5 March 2026 and stood at about $2.9 billion on 9 October 2026. CoinGecko showed a market cap of about $2.93 billion on the same day.

PYUSD is multichain. Paxos's mainnet address list includes Ethereum, Arbitrum, Polygon PoS, Stable and X Layer among its native deployments; PayPal added Arbitrum in July 2025. By DefiLlama's count on 9 October 2026, the largest balances were on Ethereum (about $1.7 billion) and Arbitrum (about $361 million), with smaller amounts on Flow, Polygon and other chains. Always check token addresses against Paxos's official list before sending funds; look-alike tokens exist for every major stablecoin.

PYUSD rewards on PayPal

PayPal pays rewards to eligible users who hold PYUSD in the PayPal app. On 9 October 2026 its PYUSD page advertised a 4% annual reward rate "as of today", subject to change. Under PayPal's cryptocurrency terms:

you must opt in, and hold at least 1.0 PYUSD in an eligible account to accrue rewards;
rewards accrue daily at the annual rate divided by 365, are non-compounding, and are usually credited in PYUSD at the start of each month;
PayPal sets the rate at its sole discretion and can change or end the program;
closing your crypto account forfeits uncredited rewards, and rewards may be taxable income.

PayPal's March 2026 announcement said rewards are not available to users based in Singapore or the United Kingdom. Note who pays: the rewards come from PayPal under its own terms. The GENIUS Act's interest ban, as written, applies to stablecoin issuers, as explained below.

How to get PYUSD

PayPal or Venmo. Eligible users can buy PYUSD 1:1 for dollars; PayPal's page says there is no fee to buy PYUSD with USD on PayPal. Fees and spreads still apply when converting to other cryptocurrencies.
Outside the US. On 17 March 2026 PayPal announced PYUSD availability in PayPal accounts across 70 markets, naming countries including Colombia, Peru, Singapore (business accounts only), the United Kingdom and the United States, with the rest to follow.
External wallets and exchanges. PYUSD can be sent from PayPal to compatible wallets and traded on crypto exchanges. Check which network the exchange supports before withdrawing.
Institutions. Businesses can mint and redeem PYUSD directly through Paxos, subject to onboarding.

Every route involves identity checks, because PayPal, Paxos and exchanges are regulated. Our guide to KYC in crypto explains what to expect.

PYUSD and the GENIUS Act

The GENIUS Act, signed into law on 18 July 2025, sets federal rules for payment stablecoins. It requires issuers to hold identifiable reserves on at least a 1:1 basis in assets such as cash, bank deposits, Treasury bills with 93 days or less to maturity and overnight repos, and section 4(a)(11) says no permitted or foreign payment stablecoin issuer may pay holders "any form of interest or yield" solely for holding, using or retaining the stablecoin. Its provisions take effect on the earlier of 18 months after enactment or 120 days after regulators issue final implementing rules.

Rulemaking is under way. On 10 April 2026 FinCEN and OFAC proposed AML and sanctions program rules for permitted payment stablecoin issuers, and on 22 June 2026 FinCEN proposed a customer identification program rule for them. Both were proposals, not final rules, when checked on 9 October 2026. See our GENIUS Act guide and our CLARITY Act explainer for the wider US picture.

PYUSD risks to understand

Freezes. The PYUSD smart contract gives Paxos an asset protection role that can freeze and unfreeze any address's balance and wipe a frozen balance so authorities can seize the backing assets. Paxos says it will not freeze on its own accord. The contract can also be paused in a critical security threat.
Market price vs redemption. Most holders exit through PayPal or exchanges rather than redeeming with Paxos. On thin markets, PYUSD can trade slightly away from $1 even with full reserves.
Rewards are not guaranteed. The rate is set by PayPal and can change or end. PYUSD in a PayPal account is not a bank deposit, as PayPal's terms state.
Network and bridge risk. Holding PYUSD on a chain also means relying on that chain, and on any bridge used to move it.

Where JewelSwap fits: JewelSwap does not issue PYUSD. If you are exploring stablecoin strategies on Sui, our guide to the best DeFi platforms on Sui covers lending and liquidity options, including the stablecoin farms JewelSwap runs on Scallop and Cetus, and their risks.

Frequently asked questions

Who issues PYUSD?

PYUSD is issued by Paxos Trust Company, N.A., which received conditional OCC approval in December 2025 to convert to a national trust bank and now describes itself as OCC-regulated. PayPal brands and distributes the token.

Is PYUSD backed 1:1?

Paxos says PYUSD reserves are held 100% in US dollar deposits, US Treasuries and cash equivalents in segregated accounts. It publishes a monthly reserve report and a monthly attestation by KPMG.

What is the PYUSD market cap?

About $2.9 billion on 9 October 2026, according to DefiLlama, with CoinGecko showing about $2.93 billion. Supply peaked at about $4.2 billion on 5 March 2026.

Does PYUSD pay interest?

The token itself pays nothing. PayPal runs an opt-in rewards program for eligible users holding PYUSD in the PayPal app; it advertised a 4% annual rate on 9 October 2026, which PayPal can change at any time.

Which blockchains is PYUSD on?

PYUSD is on several chains. Paxos lists native deployments including Ethereum, Arbitrum, Polygon PoS, Stable and X Layer, and the largest balances are on Ethereum and Arbitrum.

Can PYUSD be frozen?

Yes. The PYUSD contract lets Paxos freeze an address's balance and wipe a frozen balance so authorities can seize the backing assets. Paxos says it will not do this on its own accord.

Keep reading

This article is educational and isn't financial advice. Supply and chain figures are from DefiLlama, and the market cap from CoinGecko, as of 9 October 2026; they change daily. Issuer, reserve, rewards and availability details are from Paxos, PayPal, the OCC, the Federal Register and the GENIUS Act text, checked on 9 October 2026. PayPal's rewards rate is set by PayPal and can change at any time.

Viktor Vostrikov

Co-Founder

About the author.

Co-Founder at JewelSwap & Chief Strategy Officer at iDenfy. Viktor brings his successful track record of superb development & project management.