With its cryptocurrency PYUSD, the world leader in online payment is merging its expertise with that of blockchain. PayPal USD is a US dollar-backed stablecoin that could have the capabilities to compete with Tether's USDT and Circle's USDC. Learn how PayPal wants to redefine the realm of online financial transactions with PYUSD.



What is PayPal USD (PYUSD)?

PYUSD is a stablecoin, that is to say a cryptocurrency backed by the price of another asset. In this case, as its name suggests, thee PYUSD replicates the price of the US dollar at the ratio 1:1. This means that the value of 1 PYUSD is, in theory, always equal to 1 dollar.

Launched by PayPal, PYUSD is collateralized by dollar deposits, US Treasury bills and cash equivalents.

Although it is the official crypto of PayPal, PYUSD is issued by Paxos Trust Companyan American company that issues its own stablecoins as well as the Binance stablecoin (BUSD).

To ensure that all PYUSD issued to the market are backed by an equivalent amount of US dollars, Paxos publishes monthly report on stablecoin reserveswhich describes the different products that make up the reserves.

PYUSD is an ERC-20 token issued on the Ethereum blockchain and is the only stablecoin supported by the PayPal network. It benefits from the company's decades of experience in large-scale payments, combined with the flexibility and speed of blockchain.

For PayPal CEO Dan Schulman, the creation of PYUSD is motivated by the desire to contribute to the growth of digital payments via digital assets :

“The move to digital currencies requires a stable instrument that is easily connected to a fiat currency like the US dollar. Our commitment to responsible innovation and compliance, and our ability to deliver new experiences to our customers, provides the necessary foundation (to drive the progression) of digital payments through PayPal USD. »

PayPal PYUSD Logo

PYUSD logo, styled by Cryptoast

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What is PayPal’s PYUSD crypto used for?

According to official communication from PayPal, PYUSD is primarily intended for paymentsin the same line as the services already offered by the company:

“PayPal USD is designed to reduce payment friction in virtual environments, facilitate rapid transfers of value to support friends and family, send funds or make international payments, enable direct flows to developers and customers. creators, and drive the continued expansion of digital assets by the world's biggest brands. »

For now, only users residing in the United States can use PYUSD within the PayPal ecosystem. They can therefore:

  • Transfer PYUSD between PayPal and compatible external wallets;
  • Make payments to other PayPal users using PYUSD:
  • Make purchases with PayPal USD by selecting it during checkout;
  • Convert any PayPal supported cryptocurrency to and from PYUSD.


Additionally, thanks to PYUSD, PayPal greatly accelerates its foray into the cryptocurrency industry. Still in its communication around PayPal USD, the company intends to participate in building a bridge between fiat currency and Web3 for consumers, merchants and blockchain developers.

PayPal suggests that “experiments” will soon emerge within its ecosystem, and that these will be powered by the PYUSD. No additional information is circulating on this subject, but this suggests that PayPal could certainly unveil other crypto products in the near future.

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At the time of writing these lines (September 2023), PYUSD is available on a handful of cryptocurrency exchanges such as Crypto.com, Huobi or Bybit.

As the number of PYUSD tokens in circulation is still very small (44 million units), the liquidity of pairs involving PYUSD is rather low.

Furthermore, PYUSD is available natively on PayPal, but only in the United States. There's no point trying to get it from PayPal at this time if you live outside the United States, it's simply not possible.

It is possible that PayPal will seek to expand the availability of its stablecoin over time, but the company will have to deal with regulators in different jurisdictions.

PayPal USD

Our opinion on the PayPal USD stablecoin

PYUSD is a centralized stablecoin, just like Tether's USDT or Circle's USDC. Issued from the United States and backed by the American dollar, PayPal USD must follow very strict and restrictive regulations.

At launch, this also enlivened the community, as an asset freeze function was found in the PYUSD smart contract. Although this goes against the precepts of cryptocurrencies, which advocate financial freedom, it is a mandatory feature that every centralized stablecoin of this type must adopt.

PayPal’s PYUSD is therefore a stablecoin like any other in appearancewhich notably allows protection from the volatility of cryptocurrencies.

However, where PayPal USD stands out, it is precisely that it is under the wing of a payments juggernaut which has more than 430 million active users around the world.

If PayPal truly develops a range of products linked to cryptocurrencies and PYUSD plays a leading role, it is undeniable that this will greatly contribute to the adoption of cryptos by the general public.

It remains to be seen whether PayPal will manage to avoid attracting the wrath of the Securities and Exchange Commission (SEC)the United States financial policeman well known for his attacks on cryptocurrencies of this caliber.

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This article will be updated based on future news surrounding PYUSD

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