PYUSDx Lets Companies Mint Custom PayPal-Backed Stablecoins

• PayPal, M0 and MoonPay launched PYUSDx, a white-label platform for issuing custom PYUSD-backed stablecoins
• The custom tokens work only in external on-chain apps, never inside PayPal or Venmo
• Its four-tier issuance structure currently falls outside the GENIUS Act
• Three projects processed over $100 million in the platform’s first days

PayPal went live with PYUSDx on September 9, 2026, together with blockchain infrastructure firm M0 and crypto payments company MoonPay, giving businesses a way to issue their own dollar-pegged tokens without assembling reserve management, smart contracts or compliance frameworks from scratch. The product is not a new consumer coin. It is a white-label toolkit that lets fintech teams and crypto-native builders spin up application-specific stablecoins, each one backed 1:1 by existing reserves of PayPal USD. Within its first days of operation the ecosystem moved past $100 million in combined transaction volume and assets under management across three live projects.

PayPal stopped selling a coin and started renting out its reserves

For two years PayPal pushed PYUSD at retail users while entrenched tokens dwarfed it in circulation. PYUSDx reframes that contest. Rather than competing coin against coin, PayPal now positions PYUSD as the reserve asset sitting underneath other companies’ stablecoins, which converts a consumer product into back-end plumbing for corporate digital money. May Zabaneh, senior vice president and general manager of crypto at PayPal, placed the shift at what she called the application layer, arguing that developers want to build differentiated experiences without rebuilding trusted monetary infrastructure themselves, and predicting that every fintech developer will eventually use a solution like PYUSDx. Luca Prosperi, co-founder and chief executive of M0, framed the same design from the builder side, saying the system is meant to “leave the product layer to developers.”

A fintech that wants an on-chain dollar can define its own token rules while borrowing PayPal’s reserves and MoonPay’s issuance rails. According to MoonPay’s launch parameters, that cuts the path from concept to live deployment down to days instead of months.

Four layers, four owners, one dollar of reserves

PYUSDx stacks four distinct responsibilities, each owned by a different party. The issuer controls what the token looks like and how it behaves at the top of the stack, while the monetary base stays anchored to regulated reserves at the bottom.

1 CustomizationDeveloper / issuer Token name, ticker, branding, yield routing, freeze controls and compliance rules. 2 Technical engineM0 Tokenization and the universal digital token standard the branded coins run on. 3 Issuance & operationsMoonPay Digital Assets Ltd Issues the tokens, holds the PYUSD reserves and provides real-time collateral transparency. 4 Monetary foundationPayPal & Paxos Trust PYUSD reserves backed 1:1 by Treasury bills, dollar deposits and cash equivalents.

Issuers keep a standing option to redeem their custom tokens 1:1 for native PYUSD whenever they need to move liquidity back into the traditional banking system. That redemption right is the institutional off-ramp that keeps every branded token tethered to the same dollar reserves, no matter what rules the issuer layers on top.

The custom tokens are barred from the PayPal and Venmo apps

A hard boundary sits at the center of the design. Tokens minted through PYUSDx cannot be used or viewed inside the PayPal or Venmo apps. They live only in external on-chain applications, web3 ecosystems and cross-EVM networks. The separation is not a limitation PayPal plans to remove later. It is what lets the company supply reserves to third-party tokens without absorbing responsibility for how those tokens circulate on public blockchains.

Four entities deep, the tokens slip past the GENIUS Act

The tokens pass through a chain of entities before they reach a blockchain: PayPal supplies the reserves, Paxos issues PYUSD, MoonPay Digital Assets Limited issues the custom token, and the end project deploys it. That structure raises the question of whether the custom-token layer falls under the GENIUS Act, the U.S. framework that governs stablecoin issuers, since the entity minting each token is MoonPay Digital Assets Limited rather than a federally regulated issuer. Legal documentation states the separation plainly. The custom tokens are issued solely by MoonPay Digital Assets Limited, they are not a PayPal product, they carry no affiliation with Paxos Trust Company, and they do not inherit the regulatory protections attached to retail PYUSD. PYUSD itself sits inside that framework, since Paxos operates under federal oversight after converting to a national trust charter, which is exactly the protection the custom tokens do not inherit. For PayPal, the isolation shields it from liability tied to third-party use. For an enterprise building on the platform, it leaves a live compliance question that only sharpens if U.S. supervisors decide to bring reserve-backed structures under statute.

PYUSD sits eighth while USDT owns 60% of the market

PYUSD remains a minor player at the retail level, and the numbers show how far back it starts.

Launch volume / AUM $100M+ Across three live projects PYUSD market cap $2.8B Eighth largest stablecoin USDT market share 60% Of a ~$305B market Monthly transfers $7.2T Above the U.S. ACH network New coins past $10M supply +89% Year over year, 2025 

Tether’s USDT holds about 60% of a market worth roughly $305 billion, and PYUSD’s cap of around $2.8 billion as of mid-September 2026 places it eighth. The consumer race is lopsided, and PYUSDx does little to change that directly. The macro backdrop is what PayPal is reading instead. Global stablecoin transfer volume passed $7.2 trillion a month in early 2026, overtaking the U.S. ACH network for the first time, and the number of new stablecoins scaling past $10 million in supply climbed 89% year over year in 2025. Each of those new tokens needs a reserve base, and that is the supply PayPal is trying to capture.

Three projects are live, two more land by year-end

Four builders anchor the initial ecosystem, three of them already processing volume:

• Saturn: live at launch, running transactions across DeFi and investment products
• Concrete: live at launch, focused on credit and automated on-chain vaults
• Cap: live at launch, building Bitcoin-backed financial products
• USD.AI and Fairblock: confirmed and onboarding, with custom tokens scheduled to go live by the end of 2026

The year-end cohort is the test that decides this

The next real test is the cohort due later this year. USD.AI and Fairblock will show whether teams outside the launch group can move from onboarding to live custom tokens on schedule, and whether the regulatory isolation holds once more issuers stress it. PayPal’s recent pace suggests it is willing to spend to seed demand: PYUSD supply jumped $1.3 billion in October 2025 through DeFi incentives and Layer-2 integrations on Arbitrum and Solana, and the March 2026 rollout carried consumer PYUSD features into 70 markets, many of them corridors where remittance fees still run 5% to 10%. If PYUSDx converts even a share of new token issuance into PYUSD-backed supply, the reserve base expands whether or not PayPal ever closes the retail gap on USDT.

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