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Is PayPal USD (PYUSD) halal?

Questionable

No condition fails, but 3 points remain to be verified or fall under a tolerated case.

Verdict calculated by Halal Bourse's published rules from an investigation of primary sources (project documentation, registers, decisions), conducted on 10/07/2026 and not reviewed by a human.

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The asset

stablecoin Issuer: Paxos Trust Company, N.A. (a US national trust company, supervised by the OCC according to Paxos); distributed by PayPal and Venmo.

ERC-20 token (Ethereum contract 0x6c3ea9036406852006290770bedfcaba0e23a0e8) pegged 1 to 1 to the US dollar, issued by Paxos for PayPal; 1.79 billion tokens on Ethereum on October 7, 2026 (Etherscan), about 2.9 billion in total according to CoinGecko and DefiLlama, price of 0.9999 USD.

Why this verdict

  1. Permissible purpose : met. PYUSD is used to pay, send and hold dollars on Ethereum, Solana and other blockchains, with acceptance by PayPal merchants; no main purpose of gambling, interest-bearing lending or impermissible content is found for the token itself (the placement of the reserves is covered in c2).
    • « Issued by Paxos Trust Company, N.A., PayPal USD (PYUSD) is PayPal’s stablecoin designed for payments. » Paxos (page PayPal USD) (2026-10-07)
    • « Businesses can use PYUSD on PayPal to accept payments and cross-border transactions. » PayPal (page PYUSD) (2026-10-07)
  2. No riba : to be verified or tolerated case. Paxos's terms exclude any yield for the holder, but PayPal offers an optional 4% per year in “rewards” on PYUSD held in its app, at a variable rate set at its discretion; PayPal does not state the source of this yield, which a secondary source links to the income from the reserves (deposits and Treasury securities) held by Paxos and PayPal.
  3. No gambling : met. The spot purchase is of a transferable token on Ethereum (109,269 holding addresses on October 7, 2026), trading at 0.9999 USD and redeemable 1 to 1 by verified Paxos customers; it is not a bet on a price difference with no purchase or delivery.
  4. No excessive gharar : met. Rights, issuance rules and reserves are documented: reserves in deposited dollars and Treasury securities, segregated accounts, monthly attestation reports by KPMG according to Paxos. The reports themselves and the detailed figures on the reserves could not be opened (page loaded by script).
    • « Reserves are held 100% in US dollar deposits, US treasuries and cash equivalents » Paxos (page PayPal USD) (2026-10-07)
    • « Attestation reports posted on or after February 28, 2025 are issued by KPMG LLP, an independent third-party accounting firm. » Paxos (attestations PayPal USD) (2026-10-07)
  5. Real ownership : met. PYUSD can be held in a personal Ethereum or Solana wallet, but Paxos keeps in the contract the power to freeze an address, wipe the frozen balance, pause transfers, and mint and burn tokens, and the terms authorize it to freeze and update tokens; according to the contract repository, Paxos does not freeze on its own initiative.
  6. No fraud or manipulation : to be verified or tolerated case. In August 2025, Paxos Trust Company accepted a settlement with the NYDFS ($26.5 million civil penalty and a commitment of at least $22 million for its compliance program) for due diligence failures regarding its former partner Binance and its anti-money-laundering program; the settlement does not concern PYUSD or any deception of buyers, but is a sanction against the issuer on another ground.
    • « Paxos consented to a $26.5 million civil penalty and to commit a minimum of $22 million to strengthen its compliance program. » Morrison Foerster (2025-08-12)
    • « Paxos must pay a $26.5 million civil monetary penalty to the State of New York » Cozen O'Connor (2025-08)
  7. Cas toléré : to be verified or tolerated case. l'émetteur place les réserves à intérêt sans rien verser au détenteur

Tolerance case

T3. Stablecoin whose issuer places the reserves in bank deposits and US Treasury securities and whose terms exclude any yield for the holder. The share of interest in the revenue of Paxos (an unlisted company) is not published; a third party estimates the income from the reserves at $176 million per year. Caveat: PayPal's optional rewards program pays 4% to holders who sign up (see c2), which is not a payment by the issuer.

Contract security scan

GoPlus security scan of the PYUSD contract on Ethereum: 110,686 holders; top ten wallets excluding exchanges and contracts 60%; code published. Signals found: Contract upgradeable through a proxy: the code can change after the fact (is_proxy). Top ten wallets excluding exchanges and contracts: 60% of the supply. Reading (rule A.8): issuer identified and regulated (Paxos Trust Company, supervised by the OCC); the upgradeable contract is a practice of a regulated issuer; GoPlus does not fill in the mint and blocking fields (“?”), but the code read on Etherscan contains address freezing, wiping of the frozen balance, pause and supply controllers, which are issuer powers and not rug pull signals; the 60% share held by the top ten wallets excluding exchanges exceeds 50% but, alone, falls under concentration (information).

Opinions found during the research

Opinions reported as read, named for what they are; they do not enter into the calculation of the verdict.

What could not be verified

Sources read

Other cryptos analyzed

General information: neither investment advice nor a fatwa. Verdict calculated by published rules, from financial statements read automatically and not reviewed by a human. Read the methodology