Backing Assets are PayPal's Stablecoin, Launch of 'PYUSDx' by PayPal and Two Other Companies

Key Points of This Article

• Processing amount exceeds $100 million
• No two-layer structure specified in the Genius Act

Launch of PYUSDx

On the 9th, major U.S. payment company PayPal, the emerging company M0 providing stablecoin infrastructure, and cryptocurrency payment giant MoonPay launched the platform "PYUSDx," which allows businesses to issue their own branded stablecoins.

At the start, Bitcoin-backed loans from Saturn, on-chain credit from Concrete, and asset management from Cap were introduced, with a total processing amount exceeding $100 million.

The PYUSDx token is backed 1:1 by PYUSD through on-chain smart contracts, and its management is handled by MoonPay's affiliated company, MoonPay Digital Assets.

The backing asset, PYUSD itself, is issued by the U.S. trust company Paxos and is supported by reserves consisting of dollar-denominated deposits and U.S. Treasury bonds.

M0 provides a platform where issuers can individually set elements such as token names, usage restrictions, reward distribution, collateral policies, and compatibility with multiple chains. Luca Prosperi, CEO of M0, stated that the design of the product part is entrusted to developers.

Regulatory Issues

The U.S. stablecoin regulation law, the "Genius Act," is set to be enacted in July 2025, and the formulation of detailed rules is still ongoing within regulatory authorities. This law defines the issuing entities of payment-type stablecoins and limits backing assets to cash, insured deposits, short-term U.S. Treasury bonds, government bond-backed repo transactions, and money market funds.

On the other hand, the provisions of the law do not mention a model where another stablecoin is issued backed by a stablecoin. Tokens created on PYUSDx are explicitly stated not to be products of PayPal or Paxos and cannot be used within PayPal or Venmo apps.

May Zabaneh, Senior Vice President and General Manager of PayPal's cryptocurrency division, stated that the stablecoin market is rapidly maturing. Two companies, USD.AI and Fairblock, plan to participate in PYUSDx within the year.