PYUSD: PayPal’s Digital Dollar, Actually Explained

What PYUSD Actually Is

PYUSD (PayPal USD) is a U.S. dollar–backed stablecoin issued by Paxos and integrated natively into PayPal and Venmo.

PYUSD Market Cap as of 11/26/2026

Core design points:

• Peg: 1 PYUSD is designed to track 1 U.S. dollar. On PayPal, you can buy and sell PYUSD at a 1:1 rate with USD.

• Backing: It’s fully backed by a mix of USD deposits, U.S. Treasuries, and similar cash equivalents held in reserve.

• Issuer / custodian: Issued by Paxos Trust Company, a regulated trust company that manages the reserves and on‑chain mint/burn process.

• Networks: PYUSD started on Ethereum and now extends to other chains like Solana and Stellar, making it usable beyond PayPal’s walled garden.

From a user’s perspective, it’s positioned as “digital cash that lives in PayPal” — stable like USD, but with crypto rails when needed.

PayPal USD (PYUSD) Tokenomics & Price Analysis

The Cool Part Spending PYUSD Like Cash at Checkout

The most differentiated feature vs. typical stablecoins is how deeply PYUSD is integrated into PayPal’s existing checkout flow.

When a merchant supports PayPal (millions of them do), PYUSD becomes a funding source alongside your normal PayPal balance, bank, or card:

1. At checkout, select “Pay with PayPal.”

2. Inside the PayPal pop‑up, choose PYUSD as your funding source.

3. PayPal handles the conversion behind the scenes effectively selling your PYUSD to settle the purchase in the merchant’s desired currency.

Key details:

• It feels like using a PayPal balance. There’s no separate “crypto checkout” UX you have to learn; it’s just another balance option.

• Global angle: If the merchant is in a different currency, PayPal does the FX conversion for you, just like normal PayPal flows, but funded by PYUSD.

• No internal PYUSD fees: PayPal currently charges no fees to buy, sell, hold, or send PYUSD within PayPal itself; fees kick in if you convert between PYUSD and other cryptos, or send PYUSD on‑chain (network fees).

Functionally, that makes PYUSD behave like a spendable digital cash balance in the PayPal ecosystem:

• Get paid in PYUSD → spend it on any site with PayPal checkout → never touch a bank if you don’t want to.

That “closed loop” is intentional. PayPal is building a system where value can circulate as PYUSD from user to user to merchant, with minimal reliance on legacy rails.

PayPal Checkout

How PYUSD Fits in a Stablecoin Stack

From a trading/operations lens, PYUSD is less about speculation and more about infrastructure and settlement.

Some practical angles:

• P2P flows: Users can send PYUSD to other PayPal or Venmo users with no internal fees, making it a clean rail for domestic P2P payments.

• Cross‑border & remittances: PayPal explicitly positions PYUSD for cheaper cross‑border transfers and remittances (e.g., via Xoom), while keeping value inside the PayPal ecosystem.

• Merchant settlement: PayPal’s broader strategy is to let merchants settle directly in PYUSD rather than going through legacy bank networks for every transfer. That’s lower friction, faster, and potentially cheaper at scale.

As a result, PYUSD sits at an interesting intersection:

• It competes with USDC/USDT in the crypto‑native world.

• It competes with card networks and bank rails in the payments world.

Source: PayPal