Pax Dollar (USDP): Uses, Supply and Risks

Pax Dollar (USDP) is a U.S. dollar stablecoin issued by Paxos. It is designed to track the value of one U.S. dollar, rather than to rise or fall in price like a typical cryptocurrency. Paxos describes USDP as backed one-for-one by U.S. dollars and cash equivalents, and says it can be redeemed for dollars at a one-to-one rate, subject to its terms and eligibility requirements.

USDP can be used to hold or transfer a dollar-denominated value on supported crypto networks, or as a dollar-based asset for trading. Its target is not a guarantee that every exchange price will be exactly $1: market demand, trading liquidity and access to redemption can cause small deviations. At the time of the 2026-11-05 snapshot, USDP traded at about $1, with a market capitalization of about $22.4 million. These figures change over time.

USDP is intended to provide a digital dollar that can move on blockchains. People may use it to transfer value between supported wallets, keep funds in a dollar-denominated token, or trade against other crypto assets where a trading venue supports USDP. It can also be used for payments where the recipient accepts it. These uses depend on the network, wallet, exchange or app involved; USDP is not accepted everywhere, and it is not the same as a bank deposit or physical cash.

USDP is not a general-purpose network coin used to pay transaction fees. Transfers on Ethereum usually require ETH for gas, while transactions on Solana require SOL for network fees. A wallet or service may also impose its own conditions, fees or withdrawal limits. Before sending funds, check that the recipient supports USDP on the exact network you plan to use; a matching token name alone does not ensure that two assets or networks are compatible.

USDP has been issued on Ethereum and Solana. On Ethereum it is an ERC-20 token; on Solana it is represented as a token on that network. These are separate network versions, so sending USDP to an address on the wrong chain or using an unsupported bridge can result in funds being inaccessible. Check the network and token details in your wallet or service before making a transfer.

As of 2026-11-05, the reported circulating and total supply was about 22.5 million USDP, with no maximum supply listed. Stablecoin supply can expand or contract as tokens are issued or redeemed, so this is a snapshot, not a fixed cap. The market capitalization was about $22.4 million at that time. USDP is not the native token of either Ethereum or Solana, and holding it does not provide a claim on either network.

USDP carries issuer and reserve risks: its dollar target depends on Paxos maintaining the backing and redemption process it describes, and users may not all have the same direct access to redemption. Its market price can move away from $1, particularly when liquidity is limited or during market stress. A stablecoin can lose value, and its dollar peg is not a guarantee of principal or deposit insurance.

There are also blockchain and custody risks. A transfer can be lost if you use the wrong network or address; smart-contract faults, service outages, exchange failure, frozen or restricted tokens, and scams can create additional losses or access problems. Store USDP only in a wallet that explicitly supports the correct network and token. Protect recovery phrases and private keys, use strong account security, and beware of fake tokens with the same ticker. If using a custodial exchange, understand its withdrawal, redemption and account rules. Do not treat a wallet balance as a bank account.