KEY FACTS: PayPal, in collaboration with crypto infrastructure provider MoonPay and stablecoin platform M0, announced the launch of PYUSDx, a new tokenization and issuance framework designed to enable developers to quickly create and deploy their own application-specific stablecoins backed by PayPal USD (PYUSD), the sixth-largest stablecoin with a market capitalization exceeding $4.2 billion and issued by the regulated Paxos Trust Company. PYUSDx leverages M0’s universal stablecoin platform and MoonPay’s distribution infrastructure to simplify the process, allowing launches in days rather than months while offering features such as cross-chain compatibility, flexible token economics, transparent reserve management, and branded designs tailored to specific apps, platforms, or ecosystems like gaming, DeFi, social networks, and AI tools. The platform, set to roll out this March, is distinct from the original PYUSD, PYUSDx tokens cannot be sent, stored, or used directly in PayPal or Venmo accounts, with early adopter USD.ai already building an application-specific stablecoin for AI infrastructure on the framework, amid intensifying competition in programmable dollar solutions.
Source: MoonPay/X
PayPal, MoonPay, and M0 Launch PYUSDx for Developers to Create Custom Application-Specific Stablecoins
PayPal, the global payments giant, has partnered with crypto infrastructure provider MoonPay and stablecoin platform M0 (often stylized as M^0) to launch PYUSDx. This new infrastructure platform empowers developers to create and deploy their own application-specific stablecoins backed by PayPal USD (PYUSD), marking a step toward broader adoption of stablecoins tailored to individual apps, platforms, and ecosystems.
The announcement, made on Friday, February 27, 2026, introduces PYUSDx as a dedicated tokenization and issuance framework. Unlike the core PYUSD stablecoin, launched by PayPal in August 2023 and issued by the regulated Paxos Trust Company, a federally chartered national banking association, PYUSDx operates independently. It is offered through MoonPay Digital Assets Limited and focuses on enabling branded, custom stablecoins for specific use cases rather than general circulation.
PYUSDx combines M0's universal stablecoin and digital token platform with MoonPay Group's issuance and distribution infrastructure. This integration significantly reduces the technical and operational complexities typically associated with launching a new stablecoin. Developers no longer need to build trusted monetary systems from the ground up, including reserve management, compliance frameworks, and cross-chain capabilities. Instead, they can leverage the established backing of PYUSD, which is pegged 1:1 to the US dollar and has grown to become the sixth-largest stablecoin by market capitalization, exceeding $4.2 billion in supply. Key features of PYUSDx include:
- Rapid deployment, allowing launches in days rather than months.
- Cross-chain compatibility for broader accessibility.
- Flexible token economics tailored to specific applications.
- Transparent reserve management, inheriting the regulatory trust from PYUSD's Paxos-issued foundation.
- Branded stablecoins that align with an app's identity and user experience.
May Zabaneh, PayPal's head of crypto, emphasized that the next phase of stablecoin adoption is happening at the application layer. According to her, MoonPay and M0 use PYUSDx to help bring new, application-specific stablecoins to market, anchored in a regulated, trusted foundation.
The rollout of PYUSDx is scheduled for this March, with the platform poised to address a growing demand for specialized digital dollars in decentralized finance (DeFi), gaming, social platforms, AI ecosystems, and beyond. One early adopter highlighted in the announcement is USD.ai, which is building on PYUSDx to support an application-specific stablecoin for AI infrastructure. This example illustrates how PYUSDx could enable niche use cases, such as seamless payments within AI-driven tools or protocols.
The collaboration intensifies competition in the stablecoin space, where major players are vying to dominate application-layer integrations. It follows recent expansions of PYUSD's real-world utility, including YouTube enabling payouts in PYUSD for US-based creators in late 2025. Broader industry trends, such as potential stablecoin-based payments across Meta's ecosystem (Facebook, Instagram, and WhatsApp), underscore the shift toward embedded finance powered by digital dollars.
Importantly, PYUSDx tokens are distinct from the original PYUSD, in that, they cannot be sent, stored, or used directly within PayPal or Venmo accounts. This separation ensures that app-specific stablecoins remain focused on their intended ecosystems while still benefiting from PYUSD's regulatory compliance and stability.
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