PayPal, M0 and MoonPay have launched PYUSDx publicly after three live products processed about $100m through the business stablecoin platform.
PYUSDx allows companies to issue programmable tokens backed one-to-one by PayPal USD (PYUSD), while setting their own rules, compliance controls and upgrade procedures. Saturn, Concrete and Cap are currently using the infrastructure for a Bitcoin-backed lending product, an onchain investment vault and a credit platform respectively.
M0 chief executive and co-founder Luca Prosperi told crypto.news the $100m figure represents processed volume, rather than PYUSDx in circulation or reserves held against the tokens.
The platform was introduced by PayPal, MoonPay and M0 in February for developers wanting to create application-specific stablecoins without building the underlying token and reserve infrastructure themselves.
Businesses can either integrate PYUSD directly or use PYUSDx to issue a separate token with custom settings. Prosperi said the latter gives them control of administrative roles, freezing, pausing, forced transfers, minting, burning, compliance requirements and software upgrades.
With a direct PYUSD integration, those functions follow rules set by its issuer. Under PYUSDx, most roles attached to a custom token sit with the business that deployed it. Companies can select an administrator, apply their own compliance policy and either adopt M0’s audited upgrades automatically or follow a separate process.
The model also allows businesses to decide how revenue generated by the backing is used. Revenue from PYUSD goes to its issuer, Paxos, but returns generated on the PYUSDx supporting a custom token can be directed to a treasury chosen by the business.
The tokens are non-rebasing, so holder balances do not automatically increase as revenue builds. Businesses can instead use the proceeds to reduce fees, fund rewards or add them to their profit and loss account.
Builders can also use a template accepting other approved stablecoins as backing, with separate limits for each asset. Wrapping and unwrapping take place one-to-one through a shared swap facility, while transfers between supported blockchains use a burn-and-mint process.
How PYUSDx is backed
Each business-issued token is backed one-to-one by PYUSDx held in an onchain contract, allowing users to check the backing themselves. PYUSDx is backed by PYUSD held in reserve by MoonPay Digital Assets Limited, its issuer. PYUSD is issued by Paxos Trust Company, N.A. against dollar deposits, U.S. Treasuries and cash equivalents.
The structure therefore runs from the custom token to PYUSDx, then to PYUSD and finally to the assets backing PYUSD. Prosperi said each stage is fully reserved.
M0 provides the onchain infrastructure and does not handle funds. MoonPay manages PYUSDx reserves, while Paxos holds the assets supporting PYUSD. Paxos operates as a national trust bank regulated by the U.S. Office of the Comptroller of the Currency.
The OCC has proposed reporting requirements under the GENIUS Act. Issuers covered by the proposal would submit a confidential weekly report for each payment stablecoin, as well as a quarterly filing containing further information required under the federal framework.
PayPal has also expanded PYUSD’s payment infrastructure. In July, it added the stablecoin to Polygon through the network’s Open Money Stack, which combines wallets, compliance tools and fiat conversion services. Polygon Labs said businesses can accept funds through cards, bank accounts or exchange balances, settle in PYUSD and convert into local currencies through one system.
Shared liquidity and future payment use
Prosperi said PYUSDx tokens are different wrappers around the same underlying PYUSDx asset. A user moving between two custom tokens first unwraps the original token into PYUSDx before creating the second, with the shared facility completing the exchange at par and without a spread.
That means projects do not need separate liquidity pools or secondary markets for every token pairing. Prosperi compared it with deposits at different banks clearing at par through a common, fully reserved settlement asset, with a smart contract handling the process.
For conversion into fiat, users exchange the custom token for PYUSDx, convert PYUSDx into PYUSD and then use an off-ramp or redemption service supporting PYUSD-to-dollar transactions.
M0 uses the same swapping and bridging tools across its other tokenised finance products. Saturn’s and Cap’s tokens are currently interchangeable, with the possibility of connecting PYUSD-backed tokens to digital dollars supported by other reserves.
In June, Mastercard included PYUSD settlement in a service spanning Ethereum, Solana, Polygon, Base, Arbitrum, Canton, Tempo and the XRP Ledger. Mastercard said transactions could be settled at weekends, on public holidays and outside standard banking hours, while existing security, fraud and dispute procedures remained in place.
PYUSDx has so far been used in lending, credit and investment products rather than consumer payments. Prosperi said DeFi-focused businesses were the first adopters because onchain systems are already part of their normal operations.
He said token velocity and counterparty mix would show whether those assets move into payments. “If a PYUSDx token’s velocity stays at DeFi levels a year from now, it has not left the building,” he said.
Frequent transfers to non-contract addresses, merchant settlement, payroll payments and unwrap-to-fiat transactions would indicate broader distribution. Companies with millions of existing users will ultimately determine whether PYUSDx becomes part of everyday payments and merchant settlement.
