​Paxos Trust Company is the most heavily regulated stablecoin issuer in the U.S. market. Holding a New York DFS Trust Charter — the same banking-grade regulatory tier as a state-chartered trust bank — Paxos issues its own USDP and operates as the issuer-of-record for several white-labeled stablecoins, most prominently PayPal USD (PYUSD). Reserves are held 1:1 in cash at FDIC-insured banks and short-duration U.S. Treasuries, segregated from Paxos corporate assets under New York Banking Law. Withum publishes monthly reserve attestations. This article walks through the Trust Charter structure, the issuance and redemption flow, what backs USDP and PYUSD, and where the Paxos-issued stablecoins fit in regulated payments and treasury workflows.
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Paxos sits in a category between Circle (BitLicense-regulated) and traditional bank-issued tokens. The Trust Charter requires fiduciary obligations, segregated customer assets, and bank-level supervision — a structure that lets Paxos serve regulated counterparties and white-label for partners that need the regulatory wrapper. PayPal chose Paxos for PYUSD specifically because PayPal needed an issuer with bank-grade trust authority over customer reserves; USD-backed stablecoin infrastructure covers the broader regulated-issuer rail.
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Paxos Trust Company is a New York-chartered limited purpose trust company, regulated under New York Banking Law by the New York Department of Financial Services. The Trust Charter dates to 2015 and predates the BitLicense-only regulatory path that Circle and others use. As a trust company, Paxos can hold customer assets in fiduciary capacity — the assets do not appear on the Paxos balance sheet and are bankruptcy-remote in a Paxos insolvency scenario. The original NYDFS charter letter documents the supervisory structure.
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Paxos operates Paxos National Trust (a federally regulated entity, conditional charter from OCC pending) and Paxos International (Singapore MAS-regulated for non-U.S. issuance). The corporate structure separates U.S. and non-U.S. operations to match jurisdictional regulatory requirements; for instance, USDG (Global Dollar) is issued through the Singapore entity for non-U.S. distribution.
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Paxos issues or operates as issuer-of-record for several stablecoins:

The shared infrastructure across these tokens is the Paxos issuance platform — the smart contracts, the reserve management, the AML/sanctions compliance — with the brand and distribution handled by the partner (PayPal, the GDN consortium) or by Paxos directly (USDP).
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Paxos's issuance flow follows the standard fiat-backed model with the additional Trust Charter overlay. A verified counterparty (PayPal for PYUSD, an institutional client for USDP, a GDN partner for USDG) sends USD to a Paxos-controlled bank account; Paxos credits the reserve, segregated under the Trust Charter; and an equivalent amount of stablecoin is minted to the counterparty's onchain wallet. Redemption reverses the flow.
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The Trust Charter creates the legal structure that PayPal used in launching PYUSD: the dollars backing PYUSD are held by Paxos as trustee for PYUSD holders, not as Paxos corporate assets. In the unlikely event of a Paxos bankruptcy, the reserves would be available to PYUSD holders ahead of Paxos creditors. PayPal's PYUSD launch announcement describes the structure.
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The smart contracts for PYUSD and USDP are open source on github.com/paxosglobal and use the standard Paxos issuance template — ERC-20 base plus pause, freeze, and mint/burn controls held by the Trust Company.
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Paxos publishes monthly transparency reports on paxos.com/transparency. Reserve composition is disclosed for each token Paxos issues:

Per-token segregation is part of the Trust Charter requirement: each stablecoin's reserves are held in a separate trust account, so reserves backing PYUSD cannot be used to back USDP or vice versa. This is a structural difference from non-trust-chartered issuers, where reserves can be commingled in the issuer's general reserve pool.
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Paxos engages Withum for monthly reserve attestations. Each report attests, at the reporting date, that reserves matched outstanding supply for each stablecoin Paxos issues. Reports are agreed-upon-procedures attestations under AICPA standards — point-in-time reserve confirmations, not full GAAS audits.
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The monthly cadence puts Paxos in the same disclosure tier as Circle. The Trust Charter adds quarterly NYDFS supervisory reporting on top of the public attestations — a regulatory disclosure layer that's not publicly visible but provides the supervisory examination function. NYDFS examinations of trust companies follow standard bank examination procedures, including reserve verification, AML/BSA controls, and operational risk review.
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For PYUSD specifically, the SEC's 2024 closure of an investigation into PayPal's PYUSD operations without enforcement action confirmed the regulatory structure — PayPal's 10-K filings describe the closure and the ongoing operational structure.
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Paxos-issued stablecoins are live on a smaller chain set than USDC or USDT, prioritizing chains where the issuance partner has product reach:

Paxos's chain expansion follows distribution partner demand rather than blanket multi-chain deployment — a deliberate choice driven by the per-chain compliance burden a Trust Company faces relative to a less-regulated issuer.
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The natural fit for Paxos-issued tokens is regulated payments and institutional treasury workflows where the Trust Charter's segregated-reserve structure is a procurement requirement. Banks, payment processors, and broker-dealers integrating stablecoin functionality often require an issuer with bank-grade regulatory authority; Paxos meets that bar.
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PYUSD specifically is positioned for the PayPal payments ecosystem — Xoom remittances, PayPal merchant settlement, and Venmo integration. PayPal's distribution surface plus Paxos's regulated issuance creates a stablecoin that flows directly through existing payment rails. Stablecoin payment gateways covers PYUSD's role in merchant flows.
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USDG is the third Paxos-issued stablecoin and the youngest of the lineup. Launched in November 2024, USDG sits inside the Global Dollar Network — a consortium of distribution partners including Robinhood, Anchorage Digital, Bullish, Galaxy Digital, Kraken, and others. The structure is unusual: rather than a single distribution partner (as PYUSD has with PayPal), USDG operates through a multi-partner consortium where each participant earns a share of reserve interest income proportional to their distribution.
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This shared-yield model is a deliberate response to the Coinbase-USDC distribution arrangement. Coinbase earns a meaningful share of Circle's reserve interest income through the 2023 partnership update; the GDN structure offers an alternative where multiple distributors share the economics. Coverage of the GDN launch describes the partner economics in detail.
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USDG is issued through Paxos International (Singapore), regulated under the Monetary Authority of Singapore framework. This places USDG outside the U.S. NYDFS perimeter for issuance but inside MAS supervision for the issuing entity. Singapore's stablecoin regulatory framework, finalized in 2023, requires 1:1 reserves at MAS-licensed credit institutions and specific reserve-composition limits — a structure broadly analogous to MiCA in the EU and NYDFS Trust Charter in New York.
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Among the major regulated stablecoin issuers, Paxos's NYDFS Trust Charter is the most senior regulatory structure. The comparison points:

The Trust Charter structure is the differentiator: trust companies hold customer assets in fiduciary capacity off the corporate balance sheet, while BitLicensed entities hold them as corporate assets subject to bankruptcy-remote structuring at the operational level. Both meet institutional procurement standards; the Trust Charter is the more senior structure for fiduciary asset protection.
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Eco is a Paxos partner rail. Eco Routes orchestrates PYUSD movement across Ethereum and Solana, and as PYUSD expands to additional chains, Eco extends routing automatically. Treasury teams handling PYUSD inflows and outflows alongside USDC, USDT, and USDS integrate Eco once for unified stablecoin orchestration without managing per-chain bridge logic.
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USDP is Paxos's own-branded stablecoin; PYUSD is white-labeled for PayPal. Both are issued by Paxos Trust Company under the same NYDFS Trust Charter, with reserves held in separate segregated trust accounts. PYUSD has materially larger supply (~$2B+) due to PayPal's distribution surface.
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Both are heavily regulated and reserve-attested monthly. PYUSD reserves sit under a NYDFS Trust Charter (bank-grade fiduciary structure); USDC reserves sit under a NY DFS BitLicense framework. The structural protections differ in detail; both meet institutional procurement standards. Compliance tools covers the supporting infrastructure.
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In February 2023, NYDFS ordered Paxos to cease minting BUSD as part of the broader regulatory action involving Binance. Existing BUSD remains redeemable but no new supply is minted; the supply has wound down accordingly.
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The SEC opened an investigation into PYUSD in 2023 and closed it in 2024 without enforcement action. Paxos is regulated by NYDFS as a Trust Company; the SEC's closure confirmed the existing regulatory structure rather than altering it.
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Ethereum (launched August 2023) and Solana (added May 2024). Cross-chain transfer between the two uses LayerZero's OFT standard. Additional chain expansions follow PayPal's distribution priorities; see cross-chain stablecoin swap infrastructure for routing options.
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