PayPal USD (PYUSD) is a U.S. dollar-backed stablecoin pegged 1:1 to the U.S. dollar. It allows users to buy, hold, transfer, and make payments directly from their PayPal or Venmo accounts. Designed to merge the stability of fiat currency with the flexibility of blockchain technology, PYUSD is fully backed by U.S. dollar deposits, short-term Treasuries, and similar cash equivalents.
As of mid-2025, PYUSD has gained notable momentum in digital payments. Cross-border remittances have become faster and more affordable, while integrations with blockchains like Solana and Stellar are expanding its utility. By June 2025, PYUSD surpassed a $1 billion market capitalization, ranking among the top ten dollar-backed stablecoins in decentralized finance (DeFi) and emerging as one of the fastest-growing tokens of the year.
Strategic partnerships have accelerated this adoption. Coinbase listed PYUSD with zero trading fees, improving retail access. Collaborations with Fiserv and Mastercard are integrating PYUSD into mainstream payment systems, bridging digital assets with traditional finance. PayPal’s own Xoom service now enables international remittances using PYUSD, reducing costs and increasing transaction speed for global users.
What Is PayPal USD (PYUSD)?
PayPal USD (PYUSD) is a regulated stablecoin issued by Paxos Trust Company, a financial institution supervised by the New York State Department of Financial Services (NYDFS). Each PYUSD token is redeemable 1:1 for U.S. dollars and is backed by secure reserves, including cash and U.S. Treasury bonds.
Paxos provides monthly independent attestation reports to ensure full transparency and proof of reserves. This regulatory oversight offers users an additional layer of trust, making PYUSD a secure and compliant digital dollar alternative.
Originally launched as an ERC-20 token on Ethereum, PYUSD has expanded to other major blockchains. In May 2025, it became available on Solana, enabling faster and cheaper transactions. By June 2025, PYUSD was also integrated with emerging networks such as Berachain, Plume, and Flow. Plans to launch on Stellar—a blockchain optimized for cross-border payments—were also announced, further strengthening PYUSD’s use case in global remittances.
With a market cap of around $1 billion and partnerships with industry leaders like Coinbase and Mastercard, PYUSD stands out for its user-friendly design and seamless integration within the PayPal ecosystem.
Which Blockchains Support PYUSD?
PYUSD is a multi-chain stablecoin, offering broad compatibility across several major blockchain networks:
- Ethereum: As an ERC-20 token, PYUSD is compatible with Ethereum-based wallets, DeFi protocols, and decentralized applications (dApps).
- Solana: Since May 2025, PYUSD has been available on Solana, supporting low-cost micro-transactions and use cases in Web3 gaming and NFT marketplaces.
- Stellar (Upcoming): Integration with Stellar will focus on cross-border payments and remittances, particularly in regions with limited banking infrastructure.
- Other Networks: PYUSD is also supported on Berachain, Plume, and Flow, broadening its accessibility for developers and users in various crypto sub-ecosystems.
This multi-chain approach ensures that PYUSD remains versatile and practical for a wide range of applications—from everyday payments to advanced DeFi interactions.
How Does PayPal USD (PYUSD) Work?
PYUSD is engineered for stability, mobility, and ease of use. Here’s how it works in practice:
- 1:1 Dollar Peg: Each PYUSD token is backed by one U.S. dollar or equivalent assets held in reserve. When you buy PYUSD, dollars are added to the reserve. When you sell, the token is burned, and you receive dollars in return.
- Easy Purchases and Redemptions: Users can buy PYUSD using their PayPal balance, a linked debit card, or a bank account directly within the PayPal or Venmo app. Selling PYUSD is just as straightforward, with instant conversion back to dollars.
- Frictionless Transfers: PYUSD can be sent to other PayPal or Venmo users without fees. It can also be transferred to external Ethereum or Solana wallets, though standard network gas fees will apply.
- Spending and Conversion: When shopping online with merchants that accept PayPal, users can select PYUSD as a payment method. PayPal automatically converts it to the merchant’s local currency. PYUSD can also be swapped for other cryptocurrencies like Bitcoin (BTC) or Ethereum (ETH), subject to standard conversion fees.
Why Use PYUSD? Key Benefits
PYUSD is designed for everyday users, especially those already familiar with PayPal or Venmo. Its seamless integration means no additional apps or complex wallet setups are required. It is ideal for:
- Online shoppers paying at millions of PayPal-supported merchants.
- Individuals sending low-cost, high-speed international remittances.
- Developers building Web3 applications, smart contracts, or DeFi protocols.
- Crypto traders and DeFi users seeking stable liquidity and yield opportunities.
Advantages of PYUSD
- Stability: Fully backed by secure reserves with monthly transparency reports.
- Convenience: Native integration with PayPal and Venmo for intuitive user experiences.
- No P2P Fees: Free person-to-person transfers within the U.S. via PayPal or Venmo.
- Programmability: Compatible with smart contracts, dApps, and DeFi platforms.
Earning Rewards with PYUSD
Starting in mid-2025, PayPal began offering rewards to users who hold PYUSD in their PayPal cryptocurrency wallets. The program features a variable annual percentage yield (APY), set initially at 3.7%.
- Rewards are calculated based on the user’s average daily PYUSD balance.
- Payments are distributed monthly in PYUSD.
- No staking or locking of funds is required.
- Users retain rewards earned even if they transfer or sell PYUSD mid-cycle.
This feature enhances PYUSD’s utility as both a payment token and a yield-generating asset, making it attractive for everyday savers and cryptocurrency holders.
PYUSD vs. Other Stablecoins
While several stablecoins are available today, PYUSD stands out due to its regulatory compliance, reserve transparency, and integration with a major payment network.
Comparison with Tether (USDT)
Tether (USDT) is the most widely traded stablecoin but has faced scrutiny over its reserve audits and transparency. Unlike PYUSD, it is not issued under the direct supervision of a U.S. regulatory authority.
Comparison with USD Coin (USDC)
Like PYUSD, USDC is fully regulated and transparently backed. However, USDC is more widely integrated into DeFi applications, while PYUSD emphasizes retail payments and user-friendly access through PayPal.
Comparison with Ripple USD (RLUSD)
RLUSD is Ripple’s new stablecoin focused on institutional and cross-border settlements. PYUSD, by contrast, is geared toward consumer payments, remittances, and personal finance, with stronger retail accessibility.
How PYUSD Is Different
PYUSD’s main advantage is its built-in availability within PayPal and Venmo—two of the world’s most widely used payment platforms. This makes it uniquely positioned for real-world transactions, not just crypto trading.
Frequently Asked Questions
How can I buy and send PYUSD?
You can purchase PYUSD directly within PayPal or Venmo using your balance, bank account, or debit card. It is also available on supported cryptocurrency exchanges. To send PYUSD, you can transfer it fee-free to other PayPal/Venmo users or to an external Ethereum or Solana wallet (network fees may apply).
What makes Stellar integration important for PYUSD?
Stellar is optimized for fast, low-cost international payments. PYUSD’s upcoming integration with Stellar will improve its utility for cross-border remittances, especially in underserved economic regions.
Is PYUSD safe and regulated?
Yes. PYUSD is issued by Paxos, a company regulated by the NYDFS. It is fully backed with dollar reserves, attested monthly by independent auditors. PayPal also offers purchase protection for unauthorized transactions.
How is PYUSD different from USDC or USDT?
Like USDC, PYUSD is fully regulated and transparent. Its main differentiation is native integration with PayPal and Venmo, making it easier for everyday users to access. Compared to USDT, PYUSD offers stronger regulatory oversight and greater transparency.
Conclusion and Future Outlook
PayPal USD offers a unique blend of traditional financial stability and blockchain innovation. With its multi-chain availability, growing partnerships, and user-friendly design, it is positioned to play a significant role in the future of digital payments.
Upcoming features, including rewards for holders and integration with Stellar, will further increase its attractiveness for both beginners and experienced crypto users. As the stablecoin landscape evolves, PYUSD stands out for its compliance, transparency, and practical utility.
For those looking to explore more strategies in digital assets or view real-time tools for stablecoin management, PYUSD offers a compelling entry point into the world of blockchain-based finance.