The stablecoin wars are moving up the stack. PayPal, MoonPay, and M0 have announced PYUSDx, a new infrastructure framework that allows developers to launch branded, application-specific stablecoins backed by PayPal USD (PYUSD) — without rebuilding monetary infrastructure from scratch.
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The pitch is simple: instead of spending months assembling compliance, custody, liquidity, and cross-chain tooling, builders can spin up their own digital dollar in days — anchored to an existing regulated stablecoin.
In other words, PYUSDx is positioning itself as stablecoin infrastructure for the application layer.
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Why This Matters Now
Stablecoins are no longer just exchange settlement tools. They’re becoming embedded into apps, fintech platforms, AI systems, and ecosystem-specific payment flows.
According to Artemis and The Defiant data (December 2025), the number of newly issued stablecoins with more than $10 million in supply increased 89% in 2025 alone. Builders want custom digital dollars — but few want the burden of issuing one from scratch.
Launching a stablecoin traditionally requires:
Issuance infrastructure
Custody integration
Compliance frameworks
Liquidity provisioning
Cross-chain interoperability
Reserve reporting
PYUSDx aims to compress that stack into a modular platform.
What PYUSDx Actually Is
PYUSDx is not a new version of PayPal USD.
Instead, it’s a tokenization and issuance framework offered by MoonPay Digital Assets Limited that allows third parties to create application-specific stablecoins backed by PYUSD reserves.
PYUSD itself remains issued by Paxos Trust Company, N.A., a federally regulated trust company. PYUSDx tokens are separate assets, backed by PYUSD but issued through MoonPay’s infrastructure layer.
The architecture combines three players:
PayPal USD (PYUSD) as the regulated reserve base
M0’s universal stablecoin platform for interoperability and programmable token infrastructure
MoonPay’s issuance and distribution rails for go-to-market execution
The result: branded stablecoins with built-in liquidity and cross-chain reach.
What Developers Get
PYUSDx is structured to provide:
Branded Stablecoins
Developers can launch application-specific tokens backed by PYUSD while maintaining their own branding and ecosystem identity.
Fast Time-to-Market
Launch timelines are measured in days rather than months.
Cross-Chain Compatibility
Through M0’s interoperability layer, similar features can operate across multiple blockchain networks.
Reserve Transparency
On-chain reporting and reserve validation support visibility into backing structure.
Competitive Economics
Designed to offer more flexible economic models compared to traditional white-label stablecoin arrangements.
USD.ai is the first announced developer building on PYUSDx, using the framework to back a stablecoin designed for AI infrastructure.
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The Bigger Strategic Shift
The most important signal here is the direction.
“The next phase of stablecoin adoption is happening at the application layer,” said May Zabaneh, SVP and GM of Crypto at PayPal.
That framing is critical. Rather than competing solely on retail adoption or exchange liquidity, PayPal is now anchoring itself as a base layer for programmable finance. MoonPay and M0 provide the connective tissue between regulated reserves and application-layer builders.
For MoonPay, this expands its role beyond fiat on-ramps into stablecoin issuance infrastructure. For M0, it reinforces its thesis that digital dollars should be modular, programmable, and interoperable.
And for PayPal, it turns PYUSD from a single stablecoin into a reserve layer for potentially dozens — or hundreds — of derivative application-specific dollars.
