Do users truly “own” PYUSD inside PayPal?

[cryptobro]

PYUSD held in PayPal/Venmo is custodied off-chain by Paxos on behalf of PayPal, similar to a digital balance.
Users gain full self-custody only after withdrawing PYUSD to an external Ethereum wallet.
Key distinction:

In-app PYUSD: Off-chain, reversible, KYC-bound

External PYUSD: On-chain ERC-20 token, non-reversible, user-controlled
This dual model is unique among stablecoins and appeals to hybrid Web2/Web3 flows.

[Nahid Hossen]

Custodial ownership always raises big questions. Not surprised.

[Abdul Khan]

If PayPal holds the keys, it’s not full ownership. That’s the reality.