Before using PayPal USD (PYUSD), users should carefully evaluate several important factors to ensure it fits their needs and risk profile. First, understand that PYUSD is a stablecoin pegged to the US dollar, meaning its value is designed to remain stable, not to generate capital gains. It is best suited for payments, transfers, and short-term value storage rather than long-term investment.

Users should also consider platform and regulatory aspects. PYUSD operates within PayPal’s ecosystem and is subject to PayPal’s terms, compliance rules, and account controls. This means balances may be frozen or restricted if policy or regulatory issues arise. Knowing how redemptions work and whether PYUSD is available in your country is essential before use.

Another key consideration is blockchain-related risk. PYUSD is issued on Ethereum, so on-chain transfers involve network congestion, gas fees, and potential delays. Once sent on-chain, transactions are generally irreversible. Users should ensure they are comfortable managing wallets, private keys, and smart contract interactions if using PYUSD outside PayPal.

Transparency and reserves are also worth reviewing. Users should check how PYUSD is backed, how often reserves are reported, and who oversees custody. While PYUSD aims for stability, it is not a bank deposit and may not have the same protections as traditional accounts.

Finally, consider your use case. PYUSD is ideal for digital payments and crypto-related activity, but may not replace traditional banking for savings, lending, or insured deposits.