PayPal USD (PYUSD) is a stablecoin launched by PayPal and issued by Paxos, ^[2] It is fully backed by U.S. dollar deposits, U.S. Treasury's and other cash equivalents.^[1][2]

Overview

PayPal USD was launched in August 2023 by PayPal. It offers several functions. These include:

• PYUSD can be transferred to compatible crypto wallets

• both PayPal Wallets and externally.

• Customers can purchase goods with PYUSD, with automatic conversion to fiat occurring at the point of sale.

• Customers use PYUSD to purchase and sell any of PayPal’s supported currencies.

Dan Schulman, president and CEO of PayPal, in an August press release said:

The shift toward digital currencies requires a stable instrument that is both digitally native and easily connected to fiat currency like the U.S. dollar.

PYUSD is an ERC-20 token, enabling compatibility with Ethereum. ^[1]

PayPal USD will be available to an already large and growing community of external developers, wallets and Web3 applications, can be easily adopted by exchanges, and will be deployed to power experiences within the PayPal ecosystem

In September 2023, Paxos began publishing a monthly Reserve Report for PYUSD that openly details the components that make up the stablecoin’s reserves. Additionally, Paxos provides a third-party validation of PayPal USD’s reserve holdings. This verification was set to be executed by an impartial accounting firm unrelated to the parties involved in accordance with the standards defined by the American Institute of Certified Public Accountants.^[3]

Use Cases

Some of the use cases of PayPal USD are: ^[2][3]

• International transactions
• Secure transactions
• Online shopping
• Freelancing and e-commerce
• Financial management