PayPal USD at a glance: 8.25/10 in July 2026
PayPal USD is a stablecoin issued by Paxos Trust Company (for PayPal), pegged to the US dollar via cash + treasuries. On our six-criterion composite for stablecoins, it ranks below USD Coin (USDC) while sitting above DAI and Tether (USDT) in our current composite.
Stablecoin scoring weights collateral quality, transparency, and depeg history heavily — combined they represent 55% of the composite. For any stablecoin holding meaningful capital, these are the questions that determine tail risk.
Transparency and audit posture
Monthly attestations by WithumSmith+Brown. NYDFS-supervised. Reserves fully backed by cash and US Treasuries.
Transparency is the single strongest predictor of stablecoin trust. Public quarterly audits by Big Four accounting firms (or better, full SEC filings from publicly-listed issuers) rank highest. Attestations are lower-tier but still meaningful. Opaque or infrequent disclosure is a persistent risk flag.
Regulatory posture
NYDFS BitLicense holder. Paxos is US Trust Company. Not EU MiCA registered as of 2026 but regulatory strong-hand US.
Regulatory registration matters both for user access (can you legally hold this stablecoin in your jurisdiction?) and for issuer resilience (can the issuer survive a hostile regulatory action?). MiCA compliance is the current baseline for EU access; NYDFS oversight is the strongest US signal.
Collateral quality
Cash and US Treasuries only. Same quality tier as USDC.
Collateral composition determines what happens if the issuer needs to redeem all stablecoins at once. Pure cash + short-duration US Treasuries is highest-quality — instantly liquid, minimal duration risk. Commercial paper, secured loans, or crypto-backed collateral carry additional risk that only matters until it does.
Peg stability history
Launched 2023, no depeg events. Backed by PayPal's brand and Paxos's operational maturity.
Depeg events are the most-visible stablecoin failure mode. A stablecoin that has held peg through multiple stress events (Terra collapse 2022, SVB crisis 2023) has meaningfully demonstrated its design vs one that has not been stress-tested.
Supply scale and adoption
Circulating supply of $2.75B — mid-tier adoption; not yet in the primary trading pairs on major venues. Top-10 stablecoin — supported on most major exchanges but not always available as primary pair.
Larger supply usually correlates with better acceptance across trading venues and DeFi protocols. But it also concentrates issuer risk — a failure of a top-3 stablecoin would create systemic pressure across all of crypto.
Who PayPal USD is for — and who should look elsewhere
Best fit: US and EU users who need a fully-compliant stablecoin with the strongest regulatory posture and full public audit trail.
Look elsewhere if: PayPal USD is less suitable for users whose primary priority is supply or adoption.
Direct alternatives worth comparing: USD Coin (USDC) score higher on our composite. See Best Stablecoins.
