Question 1

What is PYUSD?

Accepted Answer

PYUSD is the ticker for PayPal USD, a U.S. dollar-denominated stablecoin. It is issued by Paxos, not by PayPal Digital or another PayPal affiliate; it is designed for each token to correspond to 1 U.S. dollar. PYUSD is an onchain token, not PayPal equity, a bank deposit, or fiat currency.

Question 2

How is PYUSD supported by U.S. dollar value?

Accepted Answer

Paxos is obligated to fully back PYUSD with equivalent U.S. dollar bank deposits, U.S. Treasury securities backed by the full faith and credit of the U.S. government, and U.S. Treasury reverse repurchase agreements, and to hold these reserves for the benefit of PYUSD holders; the official terms expressly state that the reserves do not include money market funds. The reserves support the 1 U.S. dollar exchange relationship between the issuer and redemption, but do not mean every secondary-market trade will be exactly 1 U.S. dollar.

Question 3

Can PYUSD be redeemed at 1 U.S. dollar?

Accepted Answer

Subject to the applicable Paxos terms, holders may redeem PYUSD directly with Paxos at 1.00 U.S. dollar per token. PayPal Digital's terms also state that, if it buys a user's PYUSD in a Crypto Account, the price is 1.00 U.S. dollar per token; however, this service depends on its ability to simultaneously sell or redeem with Paxos at the same price. Direct redemption rights, platform buybacks, and selling on a secondary market through an exchange are different routes, with different eligibility, availability, and execution conditions.

Question 4

Why can PYUSD's market price deviate from 1 U.S. dollar?

Accepted Answer

A stablecoin's design objective should not be confused with its market trading price. Even though PYUSD is designed not to fluctuate against the U.S. dollar, PayPal's terms expressly note that prices at other trading venues may be above or below 1.00 U.S. dollar. The redemption mechanism and reserves are generally important foundations for the peg, but the secondary market is also affected by liquidity, trading routes, fees, platform availability, and market supply and demand.

Question 5

Which blockchains can PYUSD be used on?

Accepted Answer

PYUSD is issued by Paxos on the Ethereum, Solana, Arbitrum, and Stellar networks. Different networks entail different address formats, fee assets, wallet support, and receipt routes; when transferring, the sending network must match a network supported by the recipient. Sending assets on one chain to an address that does not support that network may result in assets that cannot be recovered or used.

Question 6

Does PYUSD in a PayPal Crypto Account correspond to a particular blockchain?

Accepted Answer

In a PayPal Digital Crypto Account, a PYUSD balance represents the amount of PYUSD owned by the user, but the account balance does not correspond to an identifiable onchain token or show that it belongs to a particular supported PYUSD chain; Paxos may decide at its discretion which supported chain to issue on. PayPal Digital pools customer assets with assets held for other account holders in one or more omnibus accounts and records users' interests by account balance. Therefore, a balance in the account and PYUSD on a specified network in a self-custody wallet are not the same operational state.

Question 7

What can PYUSD be used for?

Accepted Answer

PYUSD can be used as a U.S. dollar-denominated payment and transfer asset on public blockchains. Its value proposition is combining a token transferable onchain with a U.S. dollar redemption mechanism. Whether it can actually be used to pay, transfer, or receive depends on the wallet, service provider, region, supported network, and whether the counterparty accepts the asset; the existence of the token does not mean every PayPal product, merchant, or onchain application necessarily provides that functionality.

Question 8

What should be considered when holding or using PYUSD?

Accepted Answer

PYUSD is not a bank deposit or fiat currency; PayPal's terms expressly state that its Crypto Account is not a deposit account and PYUSD holdings are not deposits. Use also requires considering the performance of the issuer and service providers, the availability of redemption or support services, compliance restrictions, onchain network congestion and fees, and the risk of choosing the wrong network. PayPal Digital may cease supporting PYUSD, in which case users may need to sell or transfer out their assets.

Question 9

Does holding PYUSD earn interest generated by reserve assets?

Accepted Answer

Interest or other income generated by PYUSD reserves does not automatically belong to PYUSD holders. PayPal's terms state that Paxos may hold reserve assets that generate interest and other income and may share with PayPal Digital the income attributable to those reserve assets; holders have no right to that interest or income. Accordingly, holding PYUSD itself does not mean holding reserve assets or receiving rights to their income.

Question 10

Does PYUSD Rewards mean that holding PYUSD necessarily earns returns?

Accepted Answer

PYUSD Rewards is a separate program that PayPal Digital may offer to eligible Crypto Account users; it is not an inherent right of the PYUSD token. Users must be offered an opportunity to participate and meet eligibility requirements, such as having a Crypto Account with no negative balance, hold, limitation, or other restriction; reward conditions may also change. Whether rewards are available, how much they are, and whether participation can continue should be determined by the current product terms and account page.

Question 11

What conditions should be confirmed before transferring PYUSD?

Accepted Answer

Before transferring PYUSD, first confirm the recipient address, receiving network, and the scope of support of the service provider, then prepare the fee asset required by that network and verify the amount. Network matching is necessary: PYUSD on Ethereum, Solana, Arbitrum, and Stellar is the same stablecoin, but transactions settle on their respective networks. If operating within a PayPal Crypto Account, the available holding, buying, selling, deposit, or withdrawal functions of that account at that time also apply.

Question 12

Where can PYUSD's issuance, redemption, and platform-use rules be verified?

Accepted Answer

When verifying PYUSD, prioritize the issuance and redemption terms, reserve disclosures, and product rules of the service provider being used. Three layers of facts need to be distinguished: Paxos is responsible for issuance, reserves, and direct redemption arrangements; the blockchain determines the network for token transfers; and PayPal Digital or another platform determines whether and how it supports custody, buying, selling, or transfers out. Conflating these three layers can easily lead to incorrect judgments about what actions are actually available.

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