What is PYUSD? PayPal's stablecoin explained
PYUSD is PayPal's dollar stablecoin, issued by Paxos under federal oversight, with about $2.8 billion in circulation and rewards paid by PayPal to holders in its apps.
PYUSD, or PayPal USD, is a stablecoin designed to hold $1, issued by Paxos for PayPal. It launched in August 2023 and had about $2.8 billion in circulation on 23 September 2026, according to DefiLlama. Each token is backed by dollar deposits, US Treasuries and cash equivalents, and can be converted to dollars 1:1 inside PayPal or through Paxos.
How PYUSD works
- Issuer: Paxos Trust Company, which became a federally chartered national trust bank under the OCC in December 2025 (Paxos)
- Reserves: 100% in US dollar deposits, US Treasuries and cash equivalents (paxos.com)
- Reporting: monthly reserve attestations by KPMG, published on Paxos' transparency page
- Conversion: no fee to convert PYUSD to dollars with PayPal or Paxos
Where PYUSD lives
Chain | PYUSD supply, 23 Sep 2026 |
Ethereum | $1.63 billion |
Solana | $734 million |
Arbitrum | $349 million |
Flow | $70 million |
Polygon | $10 million |
Source: DefiLlama. PYUSD went native on Polygon in July 2026, and a LayerZero version, PYUSD0, carries it to other chains including Tron, Avalanche and Aptos.
PYUSD rewards in PayPal and Venmo
PayPal pays rewards to US users who hold PYUSD in PayPal or Venmo. On 23 September 2026 its product page advertised 4%, up from 3.7% at launch in April 2025. Rewards accrue on the average daily balance, are paid monthly in PYUSD, and the rate can change at any time (PayPal help).
The reward comes from PayPal as the distributor. Paxos, the issuer, pays holders nothing, consistent with the GENIUS Act, which bars issuers from paying holders interest. PayPal holds the PYUSD while it earns, the same as any platform reward.
Earning yield on PYUSD onchain
Outside PayPal, PYUSD earns from lending markets. On 23 September 2026, per DefiLlama:
Where | Rate | Pool size |
SparkLend, Ethereum | 1.48% | $81 million |
Kamino, Solana | 3.4% to 3.8% across markets | $5 million to $13 million each |
Rates move with borrowing demand and some include reward tokens. Upshift's Sentora USD vault on Ethereum, curated by Sentora, takes PYUSD deposits alongside USDC, USDT and RLUSD, and redeems in USDC. Current rates are on the vault page.
The October 2025 minting error
On 15 October 2025 Paxos accidentally minted 300 trillion PYUSD on Ethereum during an internal transfer meant to be $300 million. It burned the tokens within about 22 minutes and said no customer funds were affected. Some DeFi protocols briefly paused PYUSD while it was resolved (Halborn).
How PYUSD compares with other stablecoins
Stablecoin | Issuer | Regulation | Supply, 23 Sep 2026 | Backing | Main chains |
Tether | No US regulator; HQ in El Salvador | $183B | Mostly Treasuries, plus gold, bitcoin and loans | Tron, Ethereum | |
Circle | OCC national trust charter; MiCA | $75B | Cash and a government money market fund | Ethereum, Solana | |
Ethena | Not a regulated payment stablecoin | $4.9B | Stablecoins plus crypto hedged with short futures | Ethereum | |
World Liberty Financial, with BitGo | OCC trust charter (conditional) | $4.4B | Cash and government money market funds | Ethereum, BNB Chain, Solana | |
Paxos | MAS (Singapore); MiCA via Finland | $3.2B | Cash and cash equivalents | X Layer, Robinhood Chain, Solana | |
PYUSD | Paxos, for PayPal | OCC national trust charter | $2.8B | Dollar deposits, Treasuries and cash equivalents | Ethereum, Solana |
Ripple (Standard Custody) | NYDFS trust charter | $2.4B | Dollar deposits, Treasuries and cash equivalents | Ethereum, XRP Ledger |
Supply figures from DefiLlama. None of these issuers pays holders interest directly; returns come from lending, platform rewards or, for USDe, staking into sUSDe. The two largest are compared in depth in our USDC vs USDT guide.
Risks
- Issuer: PYUSD depends on Paxos holding and redeeming the reserves
- Platform rewards: PayPal sets the rewards rate and can change or end it
- Liquidity: at $2.8 billion, PYUSD trades less deeply than USDC or USDT
- DeFi: lending markets and vaults add smart contract and strategy risk. Upshift's contracts have had 10 smart contract audits by 6 independent firms
Always make sure to do your own research and be aware of the above and any other risks before depositing.
Frequently asked questions
What is the point of PYUSD?
A dollar stablecoin that PayPal and Venmo users can hold, send and spend, and that moves onchain across Ethereum, Solana and other chains.
Can you make money with PYUSD?
Yes, through PayPal's rewards (4% advertised on 23 September 2026, variable) or by lending it onchain. PYUSD itself doesn't rise in value.
Can I convert PYUSD to USD?
Yes, 1:1 with no conversion fee inside PayPal, or through Paxos for its customers.
Who issues PYUSD?
Paxos Trust Company, a national trust bank supervised by the OCC, issues it for PayPal.
What are the risks of PYUSD?
Issuer risk at Paxos, changes to PayPal's rewards, thinner liquidity than larger stablecoins, and smart contract risk if used in DeFi.
Is PYUSD the same as USDC?
No. Both are regulated dollar stablecoins, issued by different companies with separate reserves.
Keep reading
- USDC vs USDT in 2026. How the two largest stablecoins compare.
- Where USDC yield comes from. Rates and risks by venue.
- How the GENIUS and CLARITY Acts reshape stablecoin yield. Why issuers can't pay interest and platforms can.
- How neobanks and fintechs offer stablecoin yield. The model behind in-app rewards.
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