PayPal USD (PYUSD) Reseña
PayPal's dollar stablecoin, issued by Paxos under OCC supervision, with fee-free cash-out and a variable PayPal reward
Link to the company's own site · doesn't affect score
De un vistazo
PayPal USD (PYUSD) is a dollar stablecoin issued by Paxos Trust Company, N.A., an OCC-supervised national trust bank, and distributed by PayPal and Venmo. About $2.8 billion existed on 16 October 2026. KPMG's August 2026 report showed $2.89 billion of reserves, 83.2% in overnight Treasury repo, for 2.89 billion tokens. US users buy and sell it 1:1 in PayPal without fees and can opt into a PayPal-paid reward advertised at 4% in October 2026. It is not FDIC-insured and has no MiCA authorisation.
US PayPal and Venmo users who want a dollar stablecoin with fee-free conversion and a variable reward, and people moving dollars between PayPal and Ethereum, Solana or Arbitrum.
You need deep DeFi liquidity or EU (MiCA) compliance (USDC fits better), you are in the EU, or you treat the reward as guaranteed interest: PayPal sets it at its discretion and pending US rules could affect it.
Datos rápidos
- Ticker
- PYUSD
- Issuer
- Paxos Trust Company, N.A. (distributed by PayPal)
- Peg
- USD
- Backing
- fiat collateralized
- Market cap
- $2.8B
- Chains
- 7
- Attestation
- monthly
- Fiat redeem
- Yes
Desglose de puntuación Skrumble
Lee nuestra metodología de puntuación completa.
Auditors / attestors
- · KPMG LLP (monthly reserve examinations)
A favor
- Issued by Paxos Trust Company, N.A., an OCC-supervised national trust bank since December 2025
- Reserves are Treasury repo, Treasuries and cash, examined monthly by KPMG (August 2026: $2.89 billion for 2.89 billion tokens)
- US PayPal and Venmo users buy and sell PYUSD for dollars 1:1 with no fee
- PayPal-paid reward advertised at 4% in October 2026 for US users who opt in
- Available to eligible UK PayPal users since March 2026, and fee-free to trade on Coinbase under a deal announced in April 2025
En contra
- Not FDIC or SIPC insured, even inside PayPal
- The reward rate is set at PayPal's discretion and could be affected by the OCC's pending rule on third-party yield
- Far thinner on-chain liquidity than USDC or USDT (daily volume typically $30 million to $130 million in October 2026, per CoinGecko)
- No MiCA authorisation; delisted by Coinbase and Kraken for EU users
- Paxos accidentally minted 300 trillion PYUSD in October 2025 before burning it 22 minutes later
What is PYUSD? The short answer
What is PYUSD? PayPal USD is a dollar stablecoin that PayPal brands and distributes and that Paxos issues, backed by Treasury repo, Treasury securities and cash. About $2.8 billion of it existed on 16 October 2026, per CoinGecko. Inside PayPal or Venmo it behaves much like a dollar balance with a reward attached, which PayPal advertised at 4% in October 2026. On-chain it is an ordinary stablecoin that Paxos can freeze, with thinner trading markets than USDC or USDT.
So PYUSD is really two products sharing one token. This page covers both: who stands behind the coin, what the August 2026 reserve report shows, who pays the reward and why it can change, and where you can and cannot use it from the US, the UK and the EU.
Who issues PYUSD: PayPal or Paxos?
Paxos issues it; PayPal does not. The issuer is Paxos Trust Company, N.A., which became a national trust bank supervised by the OCC on 12 December 2025, when the OCC conditionally approved converting the former New York trust company into a federal charter, according to the OCC's approval letter. The bank takes no deposits and is not FDIC-insured. Paxos's parent, Paxos Holdings, is ultimately owned by a Cayman Islands holding company.
PayPal's role is distribution. PayPal's US crypto accounts are now run by PayPal Digital, Inc., a New York limited purpose trust company that does business as PayPal Digital and Venmo Digital, according to PayPal's crypto terms updated on 19 May 2026. Those terms say plainly that PYUSD is issued by Paxos, "not PayPal Digital or any other PayPal affiliate".
What backs PYUSD?
Short-term US government assets and cash, checked monthly by KPMG. The latest report, signed on 24 September 2026, covers 31 August 2026:
| Reserve asset (31 Aug 2026) | US$ million | Share |
|---|---|---|
| Overnight Treasury reverse repo (two US banks, overcollateralised) | 2,408.8 | 83.2% |
| US Treasury securities | 374.0 | 12.9% |
| Cash | 111.2 | 3.8% |
| Total reserves | 2,893.9 | 100% |
| PYUSD outstanding | 2,886.9 |
KPMG's examination report gives an unmodified opinion under AICPA attestation standards, and Paxos states that it already applies the GENIUS Act's reserve requirements. The excess over tokens was about $7.0 million, or 0.24%. The cash sits mostly in uninsured bank deposits; Paxos holds $50 million of extra deposit cover through its own captive insurer, which does not cover the full amount. Reserve reports are posted monthly on Paxos's transparency page, and the September 2026 report was not yet out on 17 October.
Is PYUSD safe?
On reserves and supervision PYUSD compares well with USDC: both hold short-term government assets and publish monthly examinations by a Big Four firm, and PYUSD's issuer, unlike USDC's, is a federally chartered trust bank. The risks are elsewhere:
- Not FDIC-insured. PayPal's terms say crypto assets, PYUSD included, "are not insured by FDIC, SIPC or any other public or private insurer". A PYUSD balance in PayPal is not a bank deposit.
- Operational risk at the issuer. On 15 October 2025 Paxos accidentally minted 300 trillion PYUSD instead of $300 million, at 3:12 pm New York time, burned them at 3:34 pm and minted the intended $300 million at 5:15 pm. A special KPMG report as of that evening showed reserves above the real supply, and Paxos said customer funds were safe, The Block reported. Nothing was lost, but Paxos blamed a "technical and operational issue", and Aave temporarily froze its PYUSD markets.
- Freeze power. Paxos's terms let it freeze PYUSD "in its sole discretion" and on legal orders, and the contract has an asset-protection role that can freeze balances. We found no public record of a PYUSD freeze.
- Thinner on-chain liquidity. PYUSD's daily trading volume typically ran between $30 million and $130 million in October 2026, per CoinGecko, a fraction of USDC's or USDT's, so large on-chain exits can move the price more.
The price record is clean. CoinGecko's daily prices over the year to 16 October 2026 stayed between $0.99833 and $1.00103, and its CoinGecko all-time low, an intraday $0.9594 on 5 December 2024, has no press coverage or known cause.
How do PYUSD rewards work, and who pays them?
PayPal runs the rewards program, not Paxos, and Paxos pays no PYUSD yield itself: its terms say the coin is "not designed to create returns or profits for holders". US users who opt in and hold at least 1 PYUSD in PayPal or Venmo earn a reward that accrues daily and is credited monthly. PayPal's PYUSD page advertised "4% rewards" in October 2026, with a note that the rate applies "as of today" and can change. The program launched in 2025 at an announced 3.7%, per PayPal's newsroom.
The fine print matters. PayPal's terms say the rate is set "in our sole discretion and is not guaranteed", that rewards are forfeited if you close the crypto account before they are credited, and that Paxos may share the interest earned on PYUSD reserves with PayPal Digital.
Venmo excludes New York residents from rewards. PayPal's help pages now say rewards are available in 60-plus markets with local tax paperwork; at the UK launch in March 2026 PayPal excluded UK and Singapore users, though its UK help page now says UK users "may" be able to earn them, so check the app.
The GENIUS Act bans stablecoin issuers from paying interest to holders. PayPal is not the issuer, so its rewards are legal today. The OCC's proposed GENIUS rule, though, would presume an issuer is paying banned yield if a "related third party" pays holders on its behalf, and in our reading PayPal's reserve-interest sharing arrangement is the kind of setup that proposal targets. The final rule was still pending in mid-October 2026, so treat the 4% as a promotional rate that regulation could change.
How do you buy, sell and cash out PYUSD?
In the US, through PayPal or Venmo, at no fee. PayPal's terms let you buy and sell PYUSD for dollars 1:1 without a fee; converting PYUSD into another crypto asset carries a spread, which PayPal estimates at 1.00%, and sending to an outside wallet costs a network fee shown before you confirm. Account holders must be US residents aged 18 or over, and PayPal warns that some features may not be available in some US locations.
Verified Paxos customers can also redeem directly with Paxos at $1, without a redemption fee under Paxos's stablecoin terms updated on 30 June 2026, though bank fees may apply. Paxos may set a minimum redemption amount, and bridged versions such as PYUSD0 cannot be redeemed with Paxos directly. Coinbase also announced in April 2025 that its users could trade PYUSD without platform fees and redeem it 1:1 for dollars on the exchange, per The Block.
In the UK, eligible PayPal users with a PayPal Balance can buy, hold and send PYUSD since 17 March 2026, when PayPal announced a 70-market rollout, per its announcement. In September 2026 South Korea's Upbit and Bithumb also listed PYUSD. In the EU, Coinbase and Kraken have delisted PYUSD for European users because it has no MiCA authorisation.
Which blockchains is PYUSD on?
Paxos issued PYUSD natively on seven chains at 31 August 2026, according to the KPMG report. Most of it sits on three:
| Chain | PYUSD (31 Aug 2026) |
|---|---|
| Ethereum | 1,840.1M |
| Solana | 743.9M |
| Arbitrum One | 277.2M |
| Stellar, Polygon, X Layer, Ink | 25.7M combined |
PayPal and Venmo accounts support only Ethereum, Solana, Arbitrum and Stellar for transfers. A separate version, PYUSD0, reaches other chains such as Avalanche, Aptos, Sei and Tron through LayerZero's bridging network, per LayerZero; Paxos does not issue or redeem PYUSD0 directly. Check the network before you send PYUSD from PayPal to an exchange.
Is PYUSD regulated?
In the US, yes. Paxos is an OCC-supervised national trust bank, and Paxos says that it "qualifies as a permitted payment stablecoin issuer under the GENIUS Act", in a July 2026 post. That is Paxos's own reading, since the GENIUS licensing process had not started by October 2026 and the law takes effect on 18 January 2027. PYUSD is not on New York's greenlist of pre-approved coins, though PayPal Digital itself holds a New York trust charter.
In the EU, no. PYUSD has no MiCA authorisation, and on 8 October 2026 ESMA told licensed crypto firms to stop services for unauthorised stablecoins, allowing only wind-down activity for up to three months. In the UK, PYUSD is available through PayPal, while the FCA's own stablecoin rules, from October 2027, cover coins issued from the UK.
PYUSD vs USDC vs USDT
| PYUSD | USDC | USDT | |
|---|---|---|---|
| Issuer | Paxos (OCC national trust bank) | Circle (NYSE-listed) | Tether (El Salvador) |
| Supply, Oct 2026 | about $2.8B | about $72B | about $183B |
| Reserve report | Monthly, KPMG | Monthly, Deloitte | Quarterly, BDO |
| Retail cash-out | PayPal/Venmo 1:1, no fee | Via exchanges (Coinbase: no fee below $5M per 30 days) | Via exchanges |
| Rewards for holders | PayPal pays (4% advertised, variable) | Coinbase pays (Coinbase One members in the US) | None from Tether |
| EU (MiCA) | Not authorised | Authorised | Not authorised |
PYUSD's edge is the PayPal account, with fee-free conversion to dollars and a reward in an app many people already use. Its drawbacks are size and reach. USDC is about 25 times larger, trades far more and is authorised in the EU, while USDT is the largest stablecoin and has the highest exchange volume.
How is PYUSD taxed in the US?
The IRS treats stablecoins as property, and digital assets you receive as a reward must be reported, since income from digital assets is taxable, per the IRS digital assets page.
PayPal says that from tax year 2025 it reports crypto sale proceeds on Form 1099-DA, and that crypto bonuses, prizes or awards of $600 or more go on Form 1099-MISC, a threshold that rises to $2,000 for 2026, per its tax help page. Under the IRS's optional method, brokers can skip reporting a customer's qualifying stablecoin sales of $10,000 or less in a year. Our US crypto tax guide covers the rules.
Who should use PYUSD?
PYUSD suits US PayPal and Venmo users who want a dollar stablecoin with no conversion fees and are happy to collect a variable reward, and people who move money between PayPal and Ethereum, Solana or Arbitrum. For them the PayPal wrapper is the point.
It suits DeFi-heavy users and EU residents less: on-chain liquidity is far thinner than USDC's, and it has no MiCA authorisation. And the 4% is PayPal's promotional choice, not a property of the coin. If you mainly want a widely used regulated dollar, USDC is the default; our stablecoin hub compares them all, and what a stablecoin is covers the basics.
Sources
- KPMG LLP / Paxos, PYUSD reserve examination, August 2026, signed 2026-09-24; special report as of 2025-10-15, signed 2025-10-20. Accessed 2026-10-17.
- Paxos, PYUSD page, transparency page and stablecoin terms (modified 2026-06-30). Accessed 2026-10-17.
- OCC, conditional approval of Paxos Trust Company, N.A., 2025-12-12; Paxos, conversion announcement. Accessed 2026-10-17.
- Paxos, GENIUS Act post, 2026-07-09. Accessed 2026-10-17.
- PayPal, cryptocurrencies terms (updated 2026-05-19), PYUSD page, PYUSD rewards help and crypto tax help. Accessed 2026-10-17.
- PayPal, PYUSD rewards launch, 2025-04-23, and 70-market rollout, 2026-03-17. Accessed 2026-10-17.
- Venmo, PayPal USD rewards. Accessed 2026-10-17.
- The Block, Paxos mistakenly mints 300 trillion PYUSD, 2025-10-15, and Coinbase removes PYUSD trading fees, 2025-04-24. Accessed 2026-10-17.
- PayPal UK, What is PayPal USD; Blockmedia, Upbit lists PYUSD, 2026-09-17. Accessed 2026-10-17.
- LayerZero, PYUSD0 distribution, 2025-09-18. Accessed 2026-10-17.
- CoinGecko, PayPal USD market data, 2026-10-16. Accessed 2026-10-17.
- NYDFS, virtual currency businesses and greenlist. Accessed 2026-10-17.
- ESMA, supervisory expectations on unauthorised stablecoins, 2026-10-08; Kraken, stablecoin offerings for EEA clients; Decrypt, Coinbase Europe restrictions, 2024-12-13. Accessed 2026-10-17.
- US Government Publishing Office, GENIUS Act; OCC, proposed GENIUS rule, 2026-03-02. Accessed 2026-10-16.
- IRS, digital assets and Form 1099-DA instructions. Accessed 2026-10-17.
- Bloq, What PYUSD's code tells us, 2023-08-17. Accessed 2026-10-17.
- Stablecoin Insider, Bithumb lists PYUSD, 2026-09-28. Accessed 2026-10-17.
- FCA, cryptoasset regime policy statement, 2026-06-30; GNcrypto, OCC targets end of October for GENIUS rules, 2026-10-16. Accessed 2026-10-16.
- Comparison table: CoinGecko, USDC and USDT market data, 2026-10-16; Circle, USDC transparency; BDO, Tether reserve report, Q2 2026, 2026-07-31; Coinbase, USDC rewards FAQ and fees; ESMA, MiCA interim register. Accessed 2026-10-16.