PYUSD is PayPal USD, a US dollar stablecoin issued by Paxos Trust Company and distributed through PayPal and Venmo. It launched in August 2023 on Ethereum, expanded to Solana in 2024, and by September 2026 reaches additional chains including Arbitrum, Flow, Polygon, and Sei. Each token is redeemable 1:1 for dollars and backed by cash, US dollar deposits, and short-term US Treasuries held by Paxos. Circulating supply sits near $2.78 billion, according to DefiLlama.
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PYUSD is PayPal's US-dollar stablecoin, issued by Paxos and circulating on Ethereum, Solana, Arbitrum, Flow, Polygon, and Sei as of September 2026. PayPal pays 4% annual rewards on eligible PYUSD balances, lets users buy, send, and hold it fee-free in the app, and is rolling out access across roughly 70 markets. It remains one of the few stablecoins with a Fortune 500 issuer distributing directly to consumers.

PayPal's own pages describe PYUSD in marketing terms. This article does the part PayPal will not: separate the brand from the mechanics. PayPal is the distributor and the consumer face. Paxos is the regulated entity that mints, burns, and holds the reserves. Understanding that split is the difference between knowing what PYUSD is and knowing how it actually works.
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PayPal does not issue PYUSD. Paxos Trust Company does. As of December 12, 2025, Paxos converted its New York limited-purpose trust charter into a national trust charter supervised by the Office of the Comptroller of the Currency, operating as Paxos Trust Company, National Association. It is the same chartered entity that issues USDP (Pax Dollar) and previously issued BUSD for Binance. PayPal contracts Paxos to mint and redeem the token, then wraps the result in the PayPal and Venmo apps.
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That structure matters for two reasons. First, the reserves backing PYUSD are held by Paxos as customer property, segregated from both Paxos's and PayPal's corporate balance sheets. Even if PayPal failed as a company, the dollars behind PYUSD would not be PayPal's to lose. Second, the regulator overseeing the entity is now the OCC at the federal level, not a state agency or a PayPal banking subsidiary. The OCC supervises Paxos's reserve practices, redemption obligations, and compliance with sanctions and anti-money-laundering rules.
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PYUSD launched in August 2023 as the first US dollar stablecoin offered by a major consumer payments company. PayPal's own PYUSD page says access is rolling out across roughly 70 markets, including buying, selling, and earning rewards in eligible countries across the Americas, Europe, Asia-Pacific, and Africa. Supply growth has followed the expansion: DefiLlama puts circulating PYUSD near $2.78 billion as of September 2026, spread across Ethereum, Solana, Arbitrum, and a handful of smaller chains.
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For context, that leaves PYUSD well behind the two largest dollar stablecoins. USDC's circulating supply sits near $74.4 billion, and Tether's USDT is near $183.3 billion, both per DefiLlama in September 2026. PYUSD is a serious entrant with a unique distribution channel, not a market leader by size.
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PYUSD reserves are held entirely in cash, US dollar deposits, and short-term US Treasuries and Treasury reverse repurchase agreements. There is no commercial paper, no corporate debt, and no crypto collateral in the reserve. The composition is deliberately narrow: instruments that can be liquidated quickly to honor 1:1 redemptions.
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Paxos publishes two documents on a monthly cadence. The first is a self-reported Reserve Report listing the specific instruments and dollar amounts, released five business days after month's end and not independently reviewed. The second is a third-party attestation; reports issued on or after February 28, 2025 come from KPMG LLP, conducted under AICPA attestation standards, verifying that reserve assets equal or exceed the PYUSD in circulation. Both live on the Paxos PYUSD transparency page, dated, so anyone can check the most recent month against the reported supply.
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An attestation is not a full financial audit. It confirms a point-in-time match between reserves and tokens; it does not opine on Paxos's internal controls the way a GAAP audit would. This is the standard model across regulated stablecoins, including USDC and USDP, and it is worth knowing the limit of what an attestation certifies. Paxos's national trust charter adds a layer most stablecoins lack: under trust law, customer assets are segregated and protected in bankruptcy, so PYUSD holders would have a claim on the reserves ahead of general creditors even in an enterprise failure.
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The peg is enforced by the mint-and-redeem mechanism, not by an algorithm. When a user buys PYUSD through PayPal, dollars flow to Paxos, Paxos adds those dollars to the reserve, and an equal number of new tokens are minted onchain. When a user redeems, the reverse happens: tokens are burned and dollars are released from the reserve. Because every token corresponds to a reserve dollar that can be redeemed 1:1, arbitrage keeps the market price near a dollar. If PYUSD trades below $1 on an exchange, a redeemer can buy cheap tokens and redeem them for a full dollar at Paxos; if it trades above, a minter can deposit dollars and sell new tokens.
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This is the same fiat-collateralized model USDC and USDP use, and it is structurally different from algorithmic stablecoins that hold their peg through supply incentives, or from synthetic dollars like Ethena's USDe that hedge a peg with derivatives. PYUSD has no such moving parts. Its peg is only as strong as Paxos's ability to redeem on demand, which is why the reserve composition and the trust segregation rules carry the weight. There is no public history of PYUSD losing its peg since its August 2023 launch.
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Direct minting and redemption with Paxos is an institutional and PayPal-mediated process, not something a retail holder does at the smart-contract level. Most users acquire and exit PYUSD through PayPal, Venmo, exchanges, or onchain swaps against USDC and USDT, where liquidity on Ethereum and Solana keeps the conversion close to par without touching the issuer at all. PayPal charges zero fees to buy, sell, hold, or transfer PYUSD between eligible PayPal users.
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PYUSD began as an ERC-20 token on Ethereum. In 2024 Paxos minted PYUSD natively on Solana, where lower fees and faster settlement made it practical for payments and DeFi at smaller ticket sizes.
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As of September 2026, DefiLlama's chain breakdown shows PYUSD circulating on Ethereum ($1.64 billion), Solana ($735 million), Arbitrum ($320 million), Flow ($69 million), and smaller balances on Polygon and Sei reached through LayerZero's omnichain messaging. Ethereum and Solana remain the two deepest-liquidity homes for the token; the LayerZero-bridged chains carry a small fraction of total supply and function mainly as reach rather than deep onchain markets.
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This multi-chain spread is exactly where a routing layer earns its keep. A holder with PYUSD on Solana who needs to pay a counterparty settling on Ethereum, or who wants to swap into USDC on Base, faces a cross-chain movement problem. Eco's stablecoin routing infrastructure handles that class of transfer, moving value across chains and between stablecoins without the holder manually bridging and re-bridging. Distribution partners such as MetaMask, Phantom, and LI.FI plug into the same plumbing.
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In April 2025 PayPal introduced rewards on PYUSD balances held in the PayPal and Venmo apps, starting at an advertised 3.7% annual rate. As of September 2026, PayPal advertises a 4% annual rate, described as variable, viewable in the app, and changeable at any time. Rewards accrue on the average daily PYUSD balance and pay out monthly in PYUSD.
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The label matters. PayPal frames this as a platform reward, not interest paid by the issuer. That framing is a direct response to the GENIUS Act, the federal stablecoin law that prohibits permitted payment stablecoin issuers and their affiliates from paying interest or yield to holders for simply holding the token. By routing the payment through PayPal as a distributor reward rather than Paxos as issuer interest, the program aims to stay on the legal side of that line.
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Whether that distinction holds is now a live rulemaking question, not a hypothetical one. On February 25, 2026, the OCC issued a notice of proposed rulemaking to implement the GENIUS Act, published in the Federal Register on March 2, 2026. The proposal addresses the interest-and-yield prohibition directly but, per legal analysis of the text, does not define "interest," "yield," or "other consideration," leaving open how affiliate-paid rewards like PYUSD's will ultimately be treated. As of this writing the rule remains proposed, not final; if the final version reads the prohibition broadly, PayPal and Paxos may need to restructure the rewards program. The rate is also region-limited: PYUSD rewards require opting in, a minimum 1 PYUSD balance, and are unavailable to New York-based US customers under current terms.
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The instinct is to compare PYUSD and USDC on backing, but their reserves look broadly similar: both are cash and short-term Treasuries, both publish monthly attestations, both are issued by regulated US entities. The real differences are distribution, scale, and the rewards model.
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Distribution is PayPal's structural advantage. PYUSD sits inside an app that hundreds of millions of consumers already use, with rewards baked into the same interface. USDC has no comparable consumer wallet; Circle's strength is institutional and developer distribution, and it has been expanding aggressively in 2026, including launching its own Arc mainnet on September 16, 2026 and agreeing to acquire cross-border payments platform Tazapay on September 8, 2026. On raw onchain reach and liquidity, USDC remains far ahead. On embedded consumer access, PYUSD has the edge.
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Scale is the other gap. USDC's roughly $74.4 billion supply dwarfs PYUSD's $2.78 billion, which translates into deeper liquidity, tighter spreads, and broader protocol support for USDC across DeFi. Fees are a function of the chain rather than the token: PYUSD and USDC both cost Ethereum gas on Ethereum and fractions of a cent on Solana. The deciding factors are where you already hold value and which app you transact in. A dedicated comparison covers the routing and rewards tradeoffs in depth.
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PYUSD carries the risk profile common to fiat-backed stablecoins plus a few specifics. Reserve risk is low by design given the cash-and-Treasuries composition, but attestations are point-in-time and not full audits. Counterparty risk runs through Paxos, whose OCC national trust charter and bankruptcy-remote structure are mitigants rather than guarantees. Regulatory risk is concentrated in the rewards program: the pending OCC rulemaking on the GENIUS Act's interest-and-yield prohibition could end or reshape the 4% offering once finalized.
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There is also concentration to note. Two parties, PayPal and Paxos, control issuance and distribution, and the token's growth is closely tied to PayPal's consumer adoption strategy. That is neither good nor bad on its face; it is a structural fact a holder should understand. This article lays out the mechanics so the decision is informed.
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PYUSD is the clearest example of a legacy payments company issuing a dollar onchain through a regulated trust. As it spreads across Ethereum, Solana, and a widening set of chains, the friction shifts from getting dollars onchain to moving them between chains and stablecoins. Eco's routing infrastructure is built for that step, settling stablecoin transfers across networks so that holding PYUSD on one chain does not lock value there. For anyone building payments on top of PayPal's dollar, the issuance is solved; the movement is where the work remains.
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Paxos Trust Company issues PYUSD; PayPal distributes it. Paxos is the OCC-chartered national trust company that mints, burns, and holds the reserves. PayPal is the consumer-facing distributor inside the PayPal and Venmo apps. The token would survive PayPal as a company because the reserves sit with Paxos as segregated customer property.
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PYUSD is backed 1:1 by cash, US dollar deposits, and short-term US Treasuries plus Treasury reverse repurchase agreements, all held by Paxos and verified by monthly third-party attestations from KPMG LLP. There is no commercial paper or crypto collateral in the reserve.
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PayPal advertises 4% as of September 2026, up from the 3.7% launch rate announced in April 2025. The rate is variable, set by PayPal, viewable in the app, and available only to opted-in US customers outside New York. It may change once the OCC finalizes its pending GENIUS Act rulemaking.
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PYUSD launched on Ethereum, expanded natively to Solana and Arbitrum, and as of September 2026 also circulates on Flow, Polygon, and Sei through LayerZero's cross-chain messaging. Ethereum and Solana hold the deepest liquidity by a wide margin.
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Supply and chain-distribution figures from DefiLlama's PYUSD, USDC, and USDT pages, fetched September 2026. Issuance, reserves, and attestation details from Paxos's PYUSD transparency page and PayPal's PYUSD product page. Paxos charter conversion from the OCC chartering notice dated December 12, 2025. Rewards rate history from PayPal's April 2025 announcement and the current PayPal Help Center pages. GENIUS Act rulemaking status from the OCC's February 25, 2026 notice of proposed rulemaking and its March 2, 2026 Federal Register publication. Circle competitive moves from Circle's September 2026 pressroom releases. Figures are dated where cited; stablecoin supplies move continuously, so verify current numbers against issuer and tracker pages before relying on them.
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PYUSD vs USDC 2026: PayPal's Dollar vs Circle's
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PYUSD Rewards 2026: How the Yield Actually Works
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Related: CLARITY Act and the CLARITY Act Timeline.