PYUSD on Stellar: PayPal's Stablecoin Explained

PYUSD on Stellar by the numbers (October 2026)

On 9 October 2026 Horizon reported 3.53M PYUSD in Stellar accounts and 8.83M in contracts, about 12.4M in total, with 10,240 authorised trustlines. PYUSD's total supply across chains was about $2.87 billion on DefiLlama, so Stellar holds well under 1% of it.

Measure (9 Oct 2026)	Value	Source
PYUSD in Stellar accounts	3.53M	Horizon
PYUSD in Stellar contracts	8.83M	Horizon
Authorised trustlines	10,240	Horizon
Aquarius PYUSD/USDC stable pool	$8.0M (4.32M PYUSD, 3.71M USDC)	Aquarius API
PYUSD in Stellar DeFi Hub vaults	$4.1M	DefiLlama
PYUSD total supply, all chains	$2.87B	DefiLlama

The Aquarius pool and the vaults together hold about 8.4M PYUSD, nearly all of the 8.83M in contracts. For context, Stellar held about 376M USDC on the same day. DefiLlama's PYUSD entry lists 19 chains, led by Ethereum ($1.73B), Solana ($0.70B) and Arbitrum ($0.36B), and does not include Stellar.

How to choose

• You hold PYUSD in PayPal and want it on Stellar: check that your wallet supports the Paxos issuer, then add the trustline.
• You want to swap PYUSD for USDC: the Aquarius stable-swap pool is the deepest venue on Stellar.
• You want yield: compare the Aquarius pools and vaults below; rates vary widely and are mostly reward-driven.
• You want to borrow against it: XOXNO accepts PYUSD as collateral in its Stables & FX group, with small caps.

The issuer — Paxos, not PayPal

PayPal brands and distributes PYUSD, but Paxos issues it and holds the reserve. Paxos's Stellar toml describes PYUSD as "100% backed by U.S. dollar deposits, short-term U.S Treasuries and similar cash equivalents" and redeemable 1:1 for dollars. KPMG examines Paxos's monthly reserve reports.

Paxos was a New York limited-purpose trust company when PYUSD launched on Stellar. On 12 December 2025, Paxos says, it converted that charter into a national trust charter supervised by the OCC, as Paxos Trust Company, N.A., and it presents PYUSD as aligned with the coming GENIUS Act rules. PayPal's developer blog says PYUSD is redeemable 1:1 through PayPal. The US rules it will fall under are covered in the GENIUS Act, explained.

Paxos's transparency page lists 2026 attestation reports for January to August, prepared by KPMG under AICPA standards. We did not find PYUSD itself in ESMA's register of MiCA e-money tokens, although Paxos's Finnish subsidiary issues other tokens there.

When PYUSD came to Stellar

PayPal and the Stellar Development Foundation announced the plan on 11 June 2025, noting that New York's financial regulator had not yet approved it. SDF announced PYUSD live on Stellar on 18 September 2025, with wallets and apps including LOBSTR, Bitcoin.com, Chipper Cash, Decaf, Arculus, Meru, CiNKO and COCA.

The timing matters for anyone reading older coverage: articles from mid-2025 describe PYUSD on Stellar as planned, not live. Both announcements framed it as a payments product: cross-border transfers, merchant payments and "PayFi", meaning working capital paid out to small businesses in PYUSD. PYUSD on Stellar is issued as a classic Stellar asset with a Stellar Asset Contract, so it works both in classic wallets and in Soroban contracts. On-chain, though, a year later the largest balances sit in liquidity pools and incentive vaults; we found no public figure for PayFi volumes. For how Stellar's issued assets work, see issuing an asset on Stellar.

Issuer controls — freeze and clawback

Horizon shows the PYUSD issuer with auth_revocable and auth_clawback_enabled both set. Paxos can freeze a holder's trustline and claw tokens back from it. Circle's USDC and EURC issuers on Stellar have revocable set but clawback disabled. That difference matters for anyone using PYUSD as collateral.

Clawback is a Stellar protocol feature: an issuer that enables it before trustlines are created can burn tokens from a holder's balance, typically to meet a court or regulator's order. It is consistent with the freeze-and-seize obligations in US stablecoin law. The practical point for DeFi is that a pool or lending contract can hold a token the issuer can partly remove, which a protocol's risk settings may or may not account for. Issuer flags are set when an asset is created; see issuing an asset on Stellar.

Aquarius — the PYUSD/USDC pool

The Aquarius PYUSD/USDC stable-swap pool held about $8.0M on 9 October 2026: 4.32M PYUSD and 3.71M USDC, with a 0.10% fee and amplification of 1,500. It is the largest pool containing USDC on Aquarius and paid about 0.13% a year in fees and AQUA rewards combined.

A stable-swap pool keeps prices close to 1:1 while the balances are roughly even, so swaps between two dollar coins have little slippage. The slight overweight in PYUSD means more people have sold PYUSD into the pool than bought it. Smaller pools pay more: Aquarius showed a concentrated PYUSD/USDC pool of about $274K returning about 11%, almost all of it rewards, and a PYUSD/sUSD concentrated pool of about $59K returning about 10%, roughly half fees and half rewards. How these pool types differ is in the Aquarius AMM explained and Aquarius concentrated liquidity.

Stellar DeFi Hub — incentive vaults

DefiLlama shows Stellar DeFi Hub holding about $55.8M on 9 October 2026, of which $4.1M was PYUSD, alongside $37.2M of USDC and $14.5M of XLM. It describes itself as vaults for Stellar assets that accrue rewards. We could not verify a current PYUSD rate.

Vault terms, lock periods and reward rates are set by the platform and change between programmes, so check the current terms in the app before depositing. Compared options for dollar yield are in USDC yield on Stellar.

XOXNO Lending — PYUSD as collateral and debt

XOXNO's mainnet configuration lists a PYUSD market priced by a single RedStone feed, with a sanity band of $0.95 to $1.05. In its Stables & FX group, PYUSD can be collateral at 86% LTV with a 90% liquidation threshold, and is borrowable in most other groups.

Capacity and usage are small. The Stables & FX supply cap for PYUSD is 200,000 tokens, and DefiLlama showed only about $12 of PYUSD supplied across XOXNO on 9 October. XOXNO also accepts the Aquarius PYUSD/USDC LP token as collateral at 50% LTV. A single price source is weaker than the two-feed setup XOXNO uses for some other assets, such as USDT0. The protocol's design is covered in XOXNO Lending on Stellar.

Risks specific to PYUSD on Stellar

The risks are concentration, issuer controls, missing data and fake tokens. One Aquarius pool holds about 35% of all PYUSD on Stellar, Paxos can claw tokens back, the most-used dashboard does not count Stellar, and Horizon lists look-alike PYUSD assets far larger than the real one.

• Concentration: 4.32M of about 12.4M PYUSD sits in a single stable-swap pool. If its incentives end and liquidity leaves, swapping PYUSD for USDC on Stellar gets more expensive.
• Clawback: a lawful order against one holder can reduce balances held in a pool or vault, which affects every depositor in it.
• Data gaps: DefiLlama's PYUSD chain list omits Stellar, so supply and market-share charts built on it will not show this market.
• Fakes: on 9 October Horizon showed a PYUSD asset from an unrelated issuer with about 590 trillion tokens and 1,639 trustlines. Only GDQE…TU2V5 is Paxos's.
• Protocol risk: pools, vaults and lending markets add smart-contract and oracle risk; see DeFi risks.

How these fit together

PYUSD reached Stellar as a payments coin and, so far, mostly serves DeFi: one deep pool against USDC, one vault programme and a lending listing. That is a common pattern for a new stablecoin on a chain, since liquidity incentives come before payment flows. It also means PYUSD's footprint can shrink quickly if rewards end. Its regulatory footing is strong: a federally supervised issuer, monthly KPMG reports and issuer controls that include clawback.

The takeaway

Treat PYUSD on Stellar as a second, well-regulated dollar alongside USDC, with three caveats: most dashboards miss it, its liquidity is concentrated in one pool, and its issuer can claw tokens back. Check the issuer, GDQE…TU2V5, before you accept any token labelled PYUSD; Horizon lists many fakes.

Sources: Horizon asset records for the Paxos PYUSD issuer, Circle's issuers and USDC (9 Oct 2026); token-metadata.paxos.com stellar.toml; Paxos newsroom (12 Dec 2025) and paxos.com/pyusd-transparency; stellar.org press releases (11 Jun 2025, 18 Sep 2025); PayPal developer blog (25 Sep 2025); Aquarius pool API (9 Oct 2026); DefiLlama stablecoins and protocol APIs (9 Oct 2026); XOXNO rs-lending-xlm configs/mainnet at 598aa1f; ESMA interim MiCA register (7 Oct 2026).