PayPal’s entry into the world of digital currencies with its native stablecoin, PYUSD, marks a pivotal moment in the convergence of traditional finance and blockchain technology. Launched on August 7, 2023, PYUSD is more than just another cryptocurrency—it's a strategic move by one of the world’s most trusted fintech platforms to redefine how users transact online. This comprehensive guide answers all your pressing questions about PYUSD, from its legitimacy and technical foundation to how you can buy, sell, and use it.
What Is PayPal Stablecoin PYUSD?
PayPal USD (PYUSD) is a U.S. dollar-pegged stablecoin built on the Ethereum blockchain as an ERC-20 token. Each PYUSD is backed 1:1 by U.S. dollar reserves, ensuring price stability. The stablecoin is issued through a partnership between PayPal and Paxos Trust Company, a New York-regulated financial institution known for issuing compliant digital assets like BUSD.
PYUSD stands out as the first stablecoin launched by a major Web2 fintech company, distinguishing itself from decentralized or crypto-native projects. Its primary purpose is to streamline digital payments within PayPal’s ecosystem, enabling faster, cheaper, and more efficient transactions without relying on traditional banking rails or volatile cryptocurrencies.
👉 Discover how PYUSD could transform your digital payments experience.
When Did PayPal Stablecoin PYUSD Launch?
PYUSD officially launched on August 7, 2023, initially available to select U.S. users through the PayPal mobile app. The rollout was phased, with full availability expected by the end of 2023. By late 2023, PYUSD was also integrated into Venmo, PayPal’s popular peer-to-peer payment platform.
To ensure transparency, Paxos began publishing monthly proof-of-reserves reports, allowing users to verify that each PYUSD in circulation is fully backed by liquid assets. This regulatory-compliant approach reinforces trust in the stablecoin’s stability and operational integrity.
How to Buy PYUSD on PayPal
Purchasing PYUSD is designed to be simple and accessible:
- Create or log in to your PayPal account.
- Complete KYC (Know Your Customer) verification—this includes providing identity documents and address verification.
- Add funds using a linked bank account, debit card, or credit card.
- Navigate to the Crypto section in the app and select PYUSD.
- Enter the amount you wish to buy and confirm the transaction.
No prior crypto experience is needed—PayPal handles wallet management and security on your behalf.
Is PYUSD Legitimate?
Yes, PYUSD is a legitimate and regulated stablecoin. Several factors support its credibility:
- Regulatory Oversight: Issued by Paxos Trust, which holds two BitLicenses from the New York State Department of Financial Services (NYDFS).
- Transparency: Monthly reserve attestations are publicly available.
- Blockchain Verification: As an Ethereum-based token, all transactions and supply data are publicly verifiable via Etherscan.
- Issuer Reputation: Backed by PayPal, a globally recognized financial services provider.
These elements make PYUSD one of the most trustworthy stablecoins in the market today.
Does PayPal Hold Cryptocurrencies?
Yes. PayPal holds over **$1 billion in cryptocurrencies**, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH), according to its Q1 2023 SEC filings. BTC and ETH make up the majority of this portfolio, valued at $499 million and $362 million respectively.
This strategic holding supports PayPal’s broader crypto services, allowing users to buy, sell, and hold digital assets directly within the app.
How to Buy PYUSD on a Cryptocurrency Exchange
While PYUSD is available directly through PayPal, it’s also listed on several major exchanges:
- Huobi: One of the first exchanges to list PYUSD, offering zero-fee trading on the PYUSD/USDT pair.
- BitMart: Supports PYUSD/USDT trading pairs with high liquidity.
More centralized exchanges are expected to list PYUSD as adoption grows. Additionally, due to its ERC-20 status, PYUSD is compatible with decentralized exchanges (DEXs) like Uniswap, where liquidity pools may soon emerge.
Is PYUSD a Scam?
No, PYUSD is not a scam. Unlike unregulated tokens or meme coins, PYUSD operates under strict financial regulations. It is not part of an ICO or fundraising event—PayPal isn’t selling tokens to raise capital. Instead, PYUSD functions purely as a payment tool within its ecosystem.
Its dollar peg, reserve backing, and regulatory compliance eliminate common red flags associated with fraudulent projects.
Who Can Buy PYUSD?
Currently, PYUSD is available to:
- Verified U.S.-based PayPal users.
- Users on supported exchanges like Huobi and BitMart (subject to regional availability).
International expansion is expected as PayPal navigates global regulatory landscapes. However, access may be restricted in jurisdictions with strict crypto regulations.
Where to Check PYUSD Price
Since PYUSD is pegged to the U.S. dollar, its target price is $1.00. However, minor fluctuations can occur due to market dynamics.
You can monitor PYUSD’s price on:
- The PayPal app
- Crypto exchanges listing PYUSD/USDT or PYUSD/USD pairs
- Third-party trackers like CoinGecko and CoinMarketCap
These platforms provide real-time data and historical charts for transparency.
Is PYUSD Better Than Tether (USDT)?
Rather than declaring one "better," it's more accurate to compare their roles:
| Feature | PYUSD | USDT |
|---|---|---|
| Issuer | PayPal & Paxos | Tether Limited |
| Launch Date | August 7, 2023 | October 6, 2014 |
| Blockchain | Ethereum (ERC-20) | Multi-chain |
| Market Cap | ~$26.9M | ~$83B |
| Regulation | NYDFS-regulated issuer | Less transparent reserves |
While USDT dominates in adoption and liquidity, PYUSD offers stronger regulatory clarity and brand trust, making it appealing for risk-averse users and institutional players.
👉 See how PYUSD compares to other top stablecoins in real time.
How to Sell PYUSD
You can sell PYUSD through multiple channels:
- Within PayPal: Convert PYUSD to USD or other supported cryptocurrencies like BTC or ETH.
- On Exchanges: Sell PYUSD for USDT or other assets on Huobi or BitMart.
- On DEXs: Once liquidity pools are established on Uniswap or similar platforms.
Selling is as straightforward as buying, with minimal fees depending on the platform.
Is PYUSD Centralized?
Yes, PYUSD is a centralized stablecoin. Paxos controls issuance, reserves, and can freeze accounts if illegal activity is suspected—similar to traditional banking systems.
While this reduces decentralization benefits, it enhances regulatory compliance and user protection, especially important for mainstream adoption.
How Much PYUSD Is in Circulation?
As of launch, the circulating supply of PYUSD was approximately 26.9 million tokens, valued at $26.9 million. This places it among the top 35 stablecoins by market cap.
Though small compared to giants like USDT or USDC, this supply is expected to grow as PayPal expands access globally.
Is PYUSD Built on Ethereum?
Yes, PYUSD is an ERC-20 token on the Ethereum blockchain. This ensures:
- Full compatibility with Ethereum wallets (e.g., MetaMask).
- Seamless integration with DeFi protocols.
- Transparent and auditable transaction history.
However, users may face high gas fees during network congestion—a known limitation of Ethereum.
Where Can You Trade the PYUSD/USDT Pair?
The PYUSD/USDT trading pair is available on:
- Huobi
- BitMart
Both exchanges offer strong liquidity and low fees. In the future, expect listings on larger platforms like Binance or Kraken, as well as DEX integrations.
Frequently Asked Questions (FAQ)
Q: Can I transfer PYUSD to external wallets?
A: Initially, transfers were restricted to within PayPal’s ecosystem. However, limited external transfers may become available as features roll out.
Q: Is PYUSD taxable?
A: Yes. In most jurisdictions, converting or spending PYUSD may trigger capital gains or income tax events. Consult a tax professional for guidance.
Q: Does PYUSD earn interest?
A: Not currently within PayPal. However, if deposited into DeFi protocols via external wallets, yield opportunities may exist.
Q: What happens if PayPal shuts down?
A: Even if PayPal exits crypto, Paxos remains responsible for maintaining reserves and honoring redemptions for PYUSD holders.
Q: Can I use PYUSD for online shopping?
A: Yes—within PayPal-enabled merchants. As adoption grows, direct crypto payments using PYUSD may expand.
Q: How often are reserves audited?
A: Paxos publishes monthly proof-of-reserves reports verified by independent accounting firms.
👉 Start exploring PYUSD and other innovative digital assets today.