PayPal USD (PYUSD)
PayPal USD (PYUSD) is a stablecoin launched by PayPal and issued by Paxos [1] [7]. It is fully backed by U.S. dollar deposits, U.S. Treasury's and other cash equivalents. [1] [7]
Overview
PayPal USD was launched in August 2023 by PayPal [1]. 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. [1]
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. [1]
PYUSD was originally launched as an ERC-20 token on the Ethereum blockchain. [1] By September 2025, its market capitalization had grown to $1.3 billion, and its availability expanded to other blockchains, including Solana, Tron, and Avalanche. This multi-chain expansion, facilitated by the interoperability protocol LayerZero, aims to provide users with faster and cheaper transaction options. [11]
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 [1]
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 [1].
Use Cases
Some of the use cases of PayPal USD are: [1]
- International transactions;
- Secure transactions;
- Online shopping;
- Freelancing and e-commerce;
- Financial management.
Partnership with Coinbase
On April 24, 2025, PayPal and Coinbase announced an expansion of their partnership aimed at increasing the adoption, distribution, and utilization of PayPal USD. This collaboration seeks to drive innovation in stablecoin-based solutions for consumers, enterprises, and institutions.
As part of the expanded partnership, Coinbase platforms will offer users the ability to buy, sell, and trade PYUSD with no platform fees. Users will also be able to redeem PYUSD 1:1 for US dollars directly on Coinbase. The companies are also committed to jointly exploring new payment use cases to accelerate the adoption and utility of stablecoin solutions for moving and managing money globally, particularly in commerce. Additionally, they plan to explore new use cases for PYUSD in DeFi and onchain platforms.
This agreement builds upon their previous collaboration announced in 2021, which allowed Coinbase users to use their PayPal accounts for immediate funding of purchases on Coinbase and for withdrawing fiat currency. [7] [8] [9] [10]
Developments
SEC Probe
In November 2023, PayPal received a subpoena from the U.S. SEC Division of Enforcement relating to PayPal USD (PYUSD). The subpoena requests the production of documents [6].
“It’s more important than ever that Congress enact legislation to provide comprehensive digital asset regulation, especially for stablecoins,” Patrick McHenry (R-NC), chairman of the House Financial Services Committee, said in a written statement. “We are currently at a crossroads to keep America at the forefront of digital asset innovation.” [6]
In April 2025, PayPal disclosed that the SEC had informed the company in February 2025, that it was “closing this inquiry without enforcement action,” effectively ending its investigation into the PYUSD stablecoin. [6]
YouTube Integration
On December 12, 2025, it was reported that YouTube began allowing its U.S.-based content creators to receive earnings in PYUSD through the Creator Wallet.
May Zabaneh, PayPal's head of crypto, confirmed the payout option. This integration followed PayPal's addition of PYUSD as a payment recipient choice in the third quarter of 2025 and is part of a broader adoption of stablecoins for payment infrastructure to enable faster settlement and lower friction. [15]
Accidental Minting Incident
On October 15, 2025, Paxos mistakenly minted approximately $300 trillion in PYUSD on the Ethereum blockchain. The company confirmed the event was the result of an internal technical error that occurred during a routine transfer. Paxos stated it immediately identified the mistake and burned the excess PYUSD within minutes of the minting. The company assured that there was no security breach, customer funds were safe, and the circulating supply was not affected. [12] [13] [14]
FV Bank Integration
In January 2025, digital lender FV Bank expanded its stablecoin capabilities through a partnership with PayPal, integrating PayPal USD (PYUSD). The integration, which is live for account holders, allows for the direct receipt of PYUSD into customers' USD accounts with automatic real-time conversion to USD.
Miles Paschini, CEO of FV Bank, stated that the integration positions FV Bank as one of the only regulated banking institutions in the USA to offer blockchain-powered payment rails and extensive stablecoin on-ramp and off-ramp services.. Account holders can also send outbound payments in PYUSD to beneficiaries without needing to mint the stablecoin or manage an external digital wallet. [4] [5] [6]