Overview
PayPal USD (PYUSD) is a dollar stablecoin launched by PayPal in August 2023, the first big stablecoin from a major traditional payments company. It is issued by Paxos Trust Company, which is regulated by New York’s financial regulator (NYDFS).
PYUSD can be bought, held and sent inside PayPal and Venmo, and also moved to crypto wallets on Ethereum, Solana and other chains. By October 2026, about $3 billion was in circulation.
How it works
- Each PYUSD is backed by US dollar deposits, short-term Treasuries and similar cash equivalents, held by Paxos.
- PayPal users can swap dollars for PYUSD and back inside the app.
- In the US, PayPal offers rewards on PYUSD balances, making it a way to earn interest on digital dollars.
- PYUSD is also issued on Stellar and other networks for payments and remittances.
The October 2025 error
On 15 October 2025, Paxos mistakenly minted about $300 trillion of PYUSD on Ethereum, many times all the dollars in existence. It burned the excess within about 20 minutes and said it was an internal technical error, not a hack; no customer funds were affected. The lending platform Aave temporarily froze PYUSD markets as a precaution. The episode showed how much depends on the issuer’s internal controls.
The PYUSD token
| PYUSD at a glance | |
|---|---|
| In circulation (Oct 2026) | about $3 billion |
| Target value | $1.00 |
| Launched | August 2023 |
| Market cap | about $3 billion (#37) |
Risks
- Small scale. PYUSD has a small share of the stablecoin market and less liquidity on exchanges.
- Operational risk. As the 2025 error showed, issuer mistakes can happen.
- Country limits. Features and rewards are mainly for US users; it is not offered under EU MiCA rules.
- PayPal’s priorities. The coin’s future depends on PayPal continuing to push it.
PYUSD vs. the competition
| PYUSD | USDC | USDG | |
|---|---|---|---|
| Issuer | Paxos for PayPal | Circle | Paxos (Global Dollar Network) |
| Main distribution | PayPal, Venmo | Exchanges, DeFi | Robinhood, Kraken |
| Rewards for users | Yes (US, via PayPal) | Via partners | Via partners |
Our verdict
PYUSD is the easiest stablecoin for PayPal and Venmo users, conservatively backed and regulated. For them, it is a convenient way to hold digital dollars and earn rewards.
But it remains small, and the 2025 minting error was a reminder that no stablecoin is risk-free. PYUSD is a tool, not an investment; spread large amounts across more than one stablecoin.
This review is for information only and is not financial advice.