MoonPay PYUSDx Framework Brings Application Specific Stablecoins to the Mainstream
MoonPay is shifting gears.
Known for allowing users to buy crypto with a credit card, the company is now delving deeper into financial infrastructure. It partnered with M0 to launch PYUSDx, a framework that allows developers to create app-specific stablecoins backed by PayPal USD.
That turns PYUSD from a simple token into a startup. Instead of navigating months of regulatory work to issue a digital dollar, developers can explore custom coins backed by PayPal.
The big question is whether this ushers in a new era of programmable money or ends up dispersing the liquid in a bunch of niche tokens.
Introducing PYUSDx, a stablecoin token framework from PayPal, @M0and MoonPay.
It is supported 1:1 by @PayPal USD
Go from build to launch in days, not months
Purpose built for release, distribution, and collaboration
Let’s build together. pic.twitter.com/oLu6KDpopo
– MoonPay
(@moonpay) February 27, 2026
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What PYUSDx and Moonpay Actually Are
Usually, companies accept an existing stablecoin like USDC or try to introduce their own, which is expensive and complicated. PYUSDx stays in the middle.
It acts as a white label layer. A gaming studio or fintech app can issue a named stablecoin, but deposits are held in PayPal USD. MoonPay and M0 own the infrastructure, so developers don’t need to build bank roads from scratch.
These tokens are separate from the main PYUSD issued by Paxos, but rely on its dollar backing. That allows apps to add custom features, like automatic payments or AI integration, without having to manage compliance and reservations.
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The strategy is clear. Instead of directly competing with Tether or Circle in terms of circulation, PayPal extends PYUSD by allowing other platforms to build on top of it. Every application that starts with PYUSDx increases the demand for basic goods.
This is in line with wider industry change. Banks, payment processors, and fintech firms are racing to control the stablecoin infrastructure. MoonPay positions itself as a back-end pipeline, targeting application-layer use cases, including AI-driven platforms, rather than just issuing retail tokens.
The Catch: It’s Not Really “PayPal Money”
It’s not all the opposite.
The biggest problem is cooperation. Tokens launched with PYUSDx are not the same as regular PYUSD on exchanges or within PayPal. They will not be directly supported on PayPal or Venmo wallets.
That creates a closed loop. If you earn a product stablecoin within the app, you probably need to exchange it back to regular PYUSD or another asset before cashing out. That adds to the conflict.
(Source: Daily Ethereum On-Chain Volume of Stablecoins / TheBlock)
There is also a risk of liquidity fragmentation. When a bunch of apps open their own versions, the money is spread over many smaller pools rather than concentrated in one deep market like USDC. While the framework was designed to handle this, it introduces additional complexity.
To many users, this may look like backend infrastructure. In essence, it can reshape the way money flows within apps while adding new layers between earning and spending.
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