PayPal USD (PYUSD) Review

How PayPal USD scores in stablecoins

This entry rates PayPal USD (PYUSD) in our stablecoin ranking. PayPal distributes the token, but the issuer, reserve holder and redeeming party is Paxos Trust Company, N.A., so most of the marks below are marks for Paxos's disclosures about PYUSD. The basis is desk research of Paxos's PYUSD page, its PYUSD transparency page, its mint and redeem page, its USD stablecoin terms (last modified June 30, 2026) and PayPal's PYUSD page, checked on November 1, 2026. No account was opened and no tokens were bought or redeemed. The category uses five equally weighted criteria, each marked 0 to 10, as set out in our ratings methodology.

The overall score is the plain average: (9 + 10 + 9 + 7 + 9) ÷ 5 = 44 ÷ 5 = 8.8. The previous overall was 8.2.

Two marks changed at this check. Regulatory oversight rose from 8 to 9 on November 1, 2026, after Paxos's PYUSD page stated that the issuer is supervised by the OCC, following the national trust charter conversion completed on December 12, 2025. It then rose to 10 under the category's scale rule of November 2, 2026, which gives 10 to an issuer that is itself chartered and supervised as a bank or trust company by a US prudential regulator; Pax Dollar, from the same issuer, receives the same 10. Redemption rights rose from 8 to 9 after Paxos's mint and redeem page and its stablecoin terms documented direct 1:1 redemption with Paxos at no fee; the earlier entry had recorded redemption only inside PayPal. Reserve transparency stays at 9 even though the attesting firm, which the old entry could not find, is now named.

Strongest criteria: oversight (10), then redemption, reporting and backing (9 each)

Regulatory oversight (10)

The token is issued by a national trust bank, not by PayPal. Paxos's PYUSD page names the Office of the Comptroller of the Currency as its supervisor, and Paxos's charter post dates the conversion from New York supervision to December 12, 2025. PayPal's own role is distribution under its own licences. Because the issuer itself holds the charter, the mark is the top of the scale. It is set level with Pax Dollar, which sits under the same charter and regulator, so the two Paxos tokens are judged on one standard.

Redemption rights (9)

There are two routes back to dollars. In PayPal and Venmo, PayPal says eligible users can buy and sell 1 PYUSD for $1 with no fee. Directly with Paxos, the mint and redeem page says redemption is 1:1, available at all times and free. The terms add the conditions: only registered Paxos customers may redeem, a minimum equal to the bank's wire fee applies, Paxos may refuse redemption for a suspended account, and a $2 monthly charge applies to balances with no activity for 12 months. Those limits keep the mark below 10.

Reserve transparency (9)

Paxos publishes a monthly self-report and a separate monthly attestation, and the transparency page lists attestations through September 2026. Naming KPMG answers the gap recorded in the previous entry. The mark stays at 9 for two reasons. Paxos says its own reports are not independently reviewed, and the attestation is a month-end check rather than one on an unannounced day, a feature the category credits in Gemini Dollar's 10. The report files themselves are downloads and were not opened for this review, so instrument-level detail was not checked.

Backing model clarity (9)

Paxos describes reserves as 100% US dollar deposits, US Treasuries and cash equivalents. That is a plain, cash-like model. It is not marked 10 because Treasuries carry some duration, unlike a cash-only reserve.

Weakest criterion: custody and segregation (7)

This is a gap in disclosure rather than an adverse finding. Paxos's terms say reserves are held for the benefit of holders in segregated custodial accounts and that assets held with Paxos Trust are bankruptcy-remote, which is more than some peers state. What is missing is the list of banks and custodians where the cash and Treasuries sit. Issuers that name their custodians score 9 here; Pax Dollar, from the same issuer, also scores 7.

What the score does not cover

• Freezing. Paxos's terms allow it to freeze PYUSD temporarily or permanently, with or without notice, after a legal directive, a partner's notice or at its sole discretion. This is common among regulated issuers and is not a criterion.
• PayPal's terms. Rewards on balances, country availability and conversion spreads are set by PayPal and can change. They are not part of the token's score, and the rewards rate is not an assessment of return.
• Network and transfer risk. Which chains PayPal accepts deposits on, smart contract risk and liquidity on exchanges were not measured.
• Deposit insurance. Paxos says the tokens themselves are not FDIC insured.

Our guide on how to assess a stablecoin explains what attestations and redemption terms can and cannot show.

PayPal USD vs Pax Dollar and USD Coin

Gemini Dollar leads the category at 9.4, and USD Coin is second at 9.0. Three coins share 8.8, listed alphabetically: Pax Dollar, PayPal USD and Ripple USD, which places PYUSD fourth of ten. Pax Dollar, from the same issuer, matches PYUSD on every criterion. USD Coin, 0.2 ahead, takes a different route: higher on reserve transparency (10 against 9) and custody (9 against 7), lower on redemption (7 against 9), and level on oversight (10) and backing (9).

Who this rating suits

The score describes a stablecoin with a federally supervised issuer, named attestations and documented free redemption, whose main gap is the unnamed custodians. It is most relevant to a PayPal or Venmo user who wants dollars on a public chain with a clear route back to cash, or to an institution that can onboard with Paxos. It says less to a holder outside PayPal with no Paxos account, who would rely on a market sale. The score assesses published documentation and is not a recommendation to hold any token.