Provider review

Stablecoins are reviewed on who exactly owes you the dollar and where you rank when they fail (30%), whether the person holding it can get a dollar back at par and whether anyone has at size (28%), what is really behind it and what the third party actually opined on (24%), and who can freeze, burn or replace your balance and whether they have (18%). The counterparty leads because the entity named on the binding terms and the holder's rank in its insolvency are fixed the moment the issuer fails, while a reserve can be restructured overnight and a redemption desk reopened. A licence claim that does not resolve on a public register is an unverified claim, never a licence.

Redemption right exercised — 8/10

Verified 19 August 2026 against the provider's own published sources; read again 29 September 2026.

Tradeoff: The protections are scoped to Paxos account-holders; the powers are scoped to everyone. §3.5.6 says the freeze, seizure, forfeiture and destruction section “This Section 3.5 applies to all holders of USD Stablecoins, regardless of whether the holder is a Customer of Paxos.” — but §2.2.2 says “Only Customers may purchase USD Stablecoins from us or redeem USD Stablecoins from us.” and the bankruptcy-remoteness sentence at §3.2.3.1 is framed as “Your assets held with Paxos Trust” and sits inside a subsection headed “3.2.3. Pass-Through Insurance Option.” Buy PYUSD on an exchange, hold it in your own wallet, and you are inside the seizure clause and outside the redemption clause. Note that the prior draft's second complaint — that PayPal's 1:1 zero-fee conversion does not reach on-chain coins — was WRONG and has been withdrawn: “Fee Table: Transferring a cryptocurrency Transfer Type Fee Receiving a crypto transfer No fee Transferring crypto to another PayPal or Venmo branded cryptocurrency account No fee Transferring crypto to an address outside of PayPal or Venmo You will be charged a cryptocurrency network fee, payable in the crypto you transfer, which varies.” The 1.5% applies only to PayPal's bundled one-step buy-and-transfer and transfer-and-sell flows. The real qualification on the PayPal leg is legal, not priced: the counterparty there is PayPal Digital, Inc., where “You do not own any specific, identifiable, Crypto Asset.” and “Crypto Assets, including PYUSD, are not insured by FDIC, SIPC or any other public or private insurer, including against cyber theft or theft by other means.”

When should I use stablecoins instead of other crypto assets?

Stablecoins make the most sense when you want more stable dollar-like value for payments, transfers, savings posture, or onchain use without the same volatility as broader crypto assets.

Are all stablecoins basically the same?

No. They differ on who owes you the dollar and where you rank if that entity fails, on whether redemption at par is a right holders have actually exercised, on what backs them and what the examiner looked at, and on who can freeze or replace your balance.

What matters most when choosing a stablecoin?

Who exactly owes you the dollar and where you rank if they fail, whether a holder can actually redeem at par and whether anyone has at size, what is really behind it and what the third party actually opined on, and who can freeze, burn or replace your balance. The name and the ticker are not on that list.