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

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. ^[4]

“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.” ^[4]

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. ^[5]