PayPal USD (PYUSD)
About
PayPal USD (PYUSD) is a USD-denominated stablecoin issued by Paxos Trust Company and redeemable 1:1 for U.S. dollars, available within the PayPal app and on Ethereum, Solana, Arbitrum, and Stellar blockchains. It enables PayPal consumers and business users to buy, sell, hold, send globally, and spend at millions of U.S. merchants where PayPal checkout is accepted. PYUSD is fully backed by U.S. dollar deposits, U.S. Treasuries, and U.S. Treasury reverse repurchase agreements held in custody by Paxos for the benefit of PYUSD holders.
Where Does Yield Come From?
PYUSD can earn a return through a loyalty rewards program (called the PYUSD Rewards Program). This is not the same as lending out your crypto or using DeFi (decentralized finance) apps.
Here is how it works:
- The money that backs every PYUSD token sits in bank accounts, U.S. Treasury bonds, and short-term Treasury agreements. Those reserves earn interest.
- By the program rules, Paxos (the company that issues PYUSD) can keep that interest as payment for its custody services. Paxos may also share some of that interest with PayPal.
- PayPal then offers eligible users the chance to opt in and earn PYUSD Rewards at a yearly rate that PayPal sets and can change at any time.
Key details about the rewards:
- Rewards build up daily based on your average PYUSD balance (you need to hold at least 1 PYUSD).
- Rewards are paid out once a month in PYUSD. They do not compound (you earn rewards only on your PYUSD balance, not on previous rewards).
- The rate is not guaranteed. PayPal can change it with an email notice, and it can end the program whenever it wants.
What the program is not:
PayPal explicitly states this is not a bank deposit account, not a stock or bond offering, and not an investment. There is no separate fee to buy, sell, or hold PYUSD on PayPal, though exchange rate spreads apply when you switch between PYUSD and other cryptocurrencies or non-U.S. currencies. Network fees apply only if you transfer PYUSD to an outside blockchain wallet (on Ethereum, Solana, Arbitrum, or Stellar). Transfers between PayPal and Venmo cryptocurrency hubs are free.
Persons
May Zabaneh
Senior Vice President and General Manager of Crypto, PayPal
Alex Chriss
President and CEO, PayPal
Charles Cascarilla
CEO and Co-Founder, Paxos Trust Company
Audits
| Audit / Date | Findings | Verdict |
|---|---|---|
Trail of Bits12-12-2022 - 16-12-2022 |
| The audit concluded with no significant flaws impacting confidentiality, integrity, or availability; the single medium-severity finding was resolved, and the remaining low/informational/undetermined items were accepted as design decisions by Paxos, leaving the PYUSD contract in a sound state for deployment. |
Halborn24-07-2025 - 25-07-2025 |
| The focused audit found no critical, high, medium, or low severity issues — only a single informational finding about an unrestricted domain separator initializer, which was acknowledged by the Paxos team, indicating a sound codebase for the scoped changes. |
Zellic14-10-2024 - 18-10-2024 |
| The single critical vulnerability (bypassing token freezes via cross-chain burn) was acknowledged and remediated before the report was published, and the remaining findings were low-severity; overall the audit indicates that the core contract logic is sound, though the system relies heavily on multi-sig controlled roles for administrative actions. |
Trail of Bits07-11-2024 |
| The audit identified no critical, high, or medium severity vulnerabilities, and all 11 low and informational findings were resolved by Paxos, confirming that the cross-chain messaging integration and token contract upgrades are safe for deployment. |
Halborn17-10-2025 - 03-11-2025 |
| All 8 reported findings were addressed (6 resolved via code commits, 1 risk-accepted, 1 acknowledged), leaving no critical or unresolved high-severity vulnerabilities, indicating a thoroughly hardened contract set for the PYUSD reward features. |
Halborn24-07-2025 - 25-07-2025 |
| The one informational finding (unrestricted public function) does not present a material risk to funds or privileges under normal operations, and the Paxos team acknowledged the recommendation; overall the code changes for the domain separator were deemed sound with all reported findings addressed. |
Zellic15-12-2025 |
| This Zellic patch review found only one informational observation—unchanged domain separator version—which was acknowledged by Paxos as intentional backward compatibility, with no critical or high-severity issues reported, indicating a low-risk security posture for the signature validation enhancements. |
Backers
PYUSD is a stablecoin product wholly created and owned by PayPal Holdings, Inc. (NASDAQ: PYPL), a publicly traded company. It is issued by Paxos Trust Company, N.A., a regulated trust company. As a corporate product of PayPal rather than a separate startup or fundraised project, PYUSD has no disclosed external venture capital funding rounds, angel investors, or institutional backers specific to the stablecoin itself. No fundraising rounds, investors, or investment amounts for PYUSD are mentioned on the official PayPal PYUSD page, the Paxos PYUSD transparency page, or in PayPal's newsroom announcements.
Legal
Legal form
Publicly traded corporation (PayPal Holdings, Inc. via its subsidiary PayPal, Inc.) acting as the service operator; PYUSD stablecoin itself is issued by Paxos Trust Company, LLC, a limited liability trust company regulated by the New York State Department of Financial Services.
Registration jurisdiction
PayPal, Inc. is incorporated in Delaware, USA, with principal place of business at 2211 N 1st St., San Jose, CA 95131 (NMLS ID #910457). PayPal Digital, Inc. (NMLS ID #2610315) is the entity to which crypto services will transition in 2026. Paxos Trust Company, LLC is a New York limited liability trust company regulated by NYDFS.
Status and notes
PYUSD is a stablecoin product of PayPal Holdings, Inc. (NASDAQ: PYPL). The cryptocurrency services are provided by PayPal, Inc. under the PayPal Cryptocurrency Terms and Conditions (last updated Feb 17, 2026). PYUSD is issued by Paxos Trust Company, LLC, not by PayPal. PYUSD is fully backed by US dollar deposits, US Treasuries, and cash equivalents, with monthly attestation reports posted on Paxos's PYUSD Transparency page. PayPal, Inc. holds money transmitter and virtual currency licenses across all applicable US states and territories. As of April 2026, crypto services will transition from PayPal, Inc. to PayPal Digital, Inc. (pending regulatory approval). Full legal agreements (User Agreement, Cryptocurrency Terms, Privacy Statement, Acceptable Use Policy) are available at paypal.com/us/legalhub. PyUSD is not legal tender; PayPal is a financial technology company, not a bank; the Cryptocurrencies Hub is not a deposit account and PYUSD is not a deposit; crypto assets are not FDIC insured.