How to Buy PayPal USD (PYUSD) in the US

PayPal USD (PYUSD) is a stablecoin currently accessible to eligible PayPal users in the United States, offering a straightforward way to exchange between PYUSD and U.S. dollars within the PayPal platform. This stablecoin is pegged to the U.S. dollar and fully supported by USD deposits, short-term U.S. Treasurys, and similar cash equivalents. This ensures that the value of PYUSD aligns with the U.S. dollar even during cryptocurrency market swings or unforeseen events that might otherwise cause the stablecoin to deviate from its pegged value.

Users can effortlessly buy, sell, and transfer PYUSD through the PayPal application or website. Besides these functions, PYUSD can be used for online purchases at merchants who support it, sent to compatible cryptocurrency wallets, or converted to other cryptocurrencies accepted by PayPal, such as Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Litecoin (LTC). There are no fees for transferring PYUSD between users, but fees are incurred when converting PYUSD to other cryptocurrencies or for online purchases and withdrawals. These fees are transparently displayed during transactions.

**Issuance and Regulation**

The stablecoin PYUSD is issued by Paxos Trust Company, a regulated blockchain infrastructure firm supervised by the New York State Department of Financial Services (NYDFS). This ensures that PayPal USD is a regulated product. Paxos, previously known for issuing Binance USD (BUSD), had to cease issuing BUSD following regulatory pressures from the U.S. Securities and Exchange Commission and the NYDFS over claims that BUSD was an unregistered security. In June 2022, PayPal received a BitLicense from the NYDFS, allowing it to provide cryptocurrency services in New York State.

Paxos Trust Company publishes monthly Reserve Reports that detail the composition of PYUSD reserves. They provide third-party attestations of the value of PYUSD reserve assets, conducted by an independent accounting firm following the standards set by the American Institute of Certified Public Accountants. This adds layers of transparency and trust to the backing of the stablecoin.

**Blockchain Support and Expansion**

On May 29, 2024, PayPal announced that its stablecoin, PYUSD, would be available on the Solana blockchain. This decision aims to make PYUSD transactions quicker and less costly, offering users more flexibility and control by providing multiple blockchain options. Solana’s speed and scalability are key attributes that make it an ideal platform for PYUSD, which aims to revolutionize commerce by providing an efficient payment method. This collaboration with PayPal aligns with Solana’s mission to drive fintech innovation. Users can manage PYUSD within their PayPal or Venmo wallets, and when transferring to external wallets, they have the option to use either the Ethereum or Solana blockchains.

Early adopters of PYUSD on the Solana blockchain include platforms like Crypto.com, Phantom, and Paxos, which facilitate buying PYUSD directly with fiat currency. This creates a seamless experience for both individual consumers and businesses.

**Comparing Stablecoins: USDT, USDC, and PYUSD**

While USDT, USDC, and PYUSD all aim to maintain a stable value pegged to the U.S. dollar, they differ significantly in terms of the issuer, transparency, regulatory oversight, and blockchain availability. USDT, issued by Tether, is the oldest and most widely adopted stablecoin but has faced scrutiny over its reserves. USDC, issued by Circle, is known for its transparency and regulatory compliance. PYUSD, the newest of the three, is issued by Paxos on behalf of PayPal and emphasizes transparency and consumer protection. Although USDT and USDC have large market capitalizations amounting to billions, PayPal USD is poised for rapid growth by leveraging its extensive user base.

**Acquiring PYUSD in the United States**

Eligible PayPal users can buy PYUSD directly through their PayPal accounts using their balance, a linked bank account, or a debit card. This can be done via the PayPal app or website. Alternatively, cryptocurrency exchanges like Coinbase and Kraken list PYUSD, allowing purchases using various payment methods such as bank transfers, debit/credit cards, or other cryptocurrencies. As PYUSD grows in popularity, it will be accessible on more platforms like Crypto.com and Phantom, potentially offering additional acquisition methods such as peer-to-peer (P2P) trading.

**Purchasing PYUSD on Coinbase and Kraken**

To buy PYUSD on Coinbase, start by creating a Coinbase account and completing the necessary verification. Link your bank account or debit card to your Coinbase profile. Once linked, use the search function to find PYUSD and enter the amount you wish to purchase. Review and confirm the details of your transaction before completing the purchase. Your acquired PYUSD will then be available in your Coinbase wallet for further storage or transfer.

Purchasing PYUSD on Kraken involves setting up a Kraken account and completing identity verification. Deposit funds into your Kraken account using supported methods like bank transfer, debit/credit cards, etc. Find the PYUSD trading pair suitable for your requirements and place a buy order. Review the order details and confirm the transaction. Your newly acquired PYUSD will be credited to your Kraken account, available for storage or withdrawal to an external wallet.

**Storing PYUSD**

Upon buying PYUSD on platforms like Coinbase or Kraken, users can store it within their exchange account wallets. For enhanced security, transferring PYUSD to a self-custodial wallet supporting either the Ethereum or Solana blockchain is a recommended practice. This way, users gain full control over their private keys and assets, minimizing the risk of exchange hacks or restrictions.

**Evaluating PYUSD as an Investment**

PYUSD is primarily designed to maintain a stable value pegged to the U.S. dollar, making it appealing for holding wealth in the cryptocurrency realm or for simplifying transactions within the PayPal ecosystem. Holding PYUSD can also help diversify a crypto portfolio, reducing overall volatility. PYUSD is not suited for those seeking significant investment returns. Potential investors should be aware of the evolving regulatory environment for stablecoins and the centralization concerns, despite Paxos’ transparency efforts. Whether or not PYUSD is a good choice depends on individual risk tolerance and financial goals. For those prioritizing stability and broader acceptance in payments, PYUSD may be worthwhile. Investors aiming for high returns might need to explore other options.