PYUSD – PayPal USD (Issued by Paxos for PayPal)
1. Overview
-
Stablecoin: PYUSD
-
Issuer: Paxos Trust Company (on behalf of PayPal Inc.)
-
Blockchain: Ethereum (ERC-20), Solana (SPL)
-
Launch: August 2023
-
Type: Fiat-backed, centralized
-
Backing: 100% USD deposits, U.S. Treasuries, cash equivalents
-
Redemption: 1:1 via PayPal, Venmo, or supported exchanges
2. Use Case
PYUSD is designed for:
-
🔁 Everyday payments via PayPal and Venmo (U.S. users)
-
💳 Merchant settlements through PayPal’s commercial network
-
🧠 Programmable money for on-chain finance & Web3 integrations
-
🌍 Cross-border transfers with lower friction than traditional remittances
-
🔒 Regulatory-compliant DeFi on Ethereum & Solana
Its dual support for consumers and institutions makes it one of the few stablecoins bridging TradFi, Fintech, and DeFiseamlessly.
3. Compliance Team & Governance
-
📌 Oversight by Edwin Aoki, CTO of PayPal Digital Currencies
-
📌 Issued and managed by Paxos Trust Company, NYDFS-regulated
-
📌 Monthly attestation by WithumSmith+Brown
4. Customer Reviews & Reputation
-
Trustpilot Score for Paxos: 1.7/5 stars
-
🔻 Frequent complaints: slow KYC processes, poor customer support, frozen withdrawals
-
🟡 No PYUSD-specific reviews yet – reputation tied to Paxos
5. CU-Check / Background
-
✅ Licensed in New York (NYDFS) and Singapore (MAS)
-
✅ SEC investigation into PYUSD closed without action in 2025
(Source) -
✅ Widely integrated across PayPal, Venmo, Coinbase, and others
(Coinbase Announcement)
6. Crypto-Economics
| Feature | Details |
|---|---|
| Issuance | On-demand when users convert USD into PYUSD via PayPal or partners |
| Redemption | 1:1 USD via PayPal or exchange partners |
| Yield | Balance-based reward system inside PayPal app |
| Supply | ~860M PYUSD in circulation (June 2025), $42M 24h trading volume |
| Mechanism | Fully fiat-backed with monthly attestation |
| Blockchains | Ethereum, Solana |
Supply data: CoinGecko
7. Final CyberFinance Compliance Rating (Ratex42)
| Category | Score | Notes |
|---|---|---|
| Authorization | 🟢 GREEN | NYDFS-regulated issuer; MAS registration; SEC probe closed |
| Transparency | 🟢 GREEN | Monthly audits; full reserve reporting; public docs |
| Client Experience | 🟠 ORANGE | Weak Paxos service reviews; 1.7/5 Trustpilot |
| Financial Soundness | 🟢 GREEN | Fully backed, fiat-pegged model with redemption assurance |
8. Backing & Value Stability
PYUSD is fully backed on a 1:1 basis with high-quality fiat-related assets. Paxos, the issuer, maintains reserves consisting of:
-
✅ USD cash deposits
-
✅ U.S. Treasury bills (short-term, highly liquid)
-
✅ Cash equivalents (e.g. reverse repo with the Federal Reserve)
These reserves are held in segregated, bankruptcy-remote accounts, meaning customer funds are fully protected and cannot be used for operational purposes. Paxos publishes monthly attestation reports confirming that the total supply of PYUSD is 100% collateralized. These attestations are audited by an independent third-party firm.
This structure ensures price stability through direct redemption rights: users can always redeem 1 PYUSD for 1 U.S. dollar via PayPal or Paxos. The issuance and burning mechanisms on-chain align supply with demand, maintaining the peg.
🟠 Final Rating: ORANGE SIGNAL
PYUSD is highly transparent and fully regulated, with broad adoption through PayPal and Venmo. However, negative user feedback for Paxos customer service brings it down from full Green status. If support improves, PYUSD could earn a Green upgrade.
✅ Summary
PYUSD is one of the most credible and useable USD stablecoins available in the market today. It combines:
-
Institutional-grade compliance
-
Mainstream integrations
-
Programmable finance potential
It’s suitable for individuals, merchants, and DeFi developers, but Paxos must improve user trust and support standards to reach top-tier status.
