Correct.

I'm in Canada and my PayPal is USD because i use ebay a lot. My attempt to set up a "US Funds" account for Paypal at TD Canada Trust met with them converting money from a Canadian buyer to US then to CAD just in time for TD to convert it to US to go into the account.

Clearly, I halted that after a day.

PayPal insists that it's impossible to transfer money in any currency except the one related to the address of the bank's head office.