PayPal Is Pushing Forward With Plans to Expand the Utility of Its U.S. Dollar-Pegged Stablecoin PYUSD

PayPal is pushing forward with plans to expand the utility of its U.S. dollar-pegged stablecoin PYUSD, aiming to bring 20 million merchants into its ecosystem by the end of 2025.

PayPal is expanding the utility of its dollar-pegged stablecoin PYUSD with plans to bring 20 million merchants into its ecosystem by 2025.

The company shared these updates during its investor day in New York, where executives outlined how the stablecoin is moving beyond its experimental phase.

PYUSD, launched last November, has a market cap of just over $700 million and has mainly been used within crypto circles despite being available through the PayPal app and Venmo. The payments giant now wants to change this by bringing the stablecoin into mainstream business applications.

One of the first initiatives will see PYUSD offered as an option for merchants to pay vendors through PayPal’s bill-pay product. This feature isn’t available yet but is expected to launch later in the year. The approach would allow merchants to “invite” vendors into the PayPal network for transactions.

“The thesis was: Can we facilitate that on PYUSD rails so as not to have the currency conversion, the friction, as well as time” Michelle Gill, general manager of PayPal’s small and medium enterprises line of business, said in an interview with Bloomberg.

This integration effort reflects PayPal’s broader strategy to create a more unified and seamless experience across its various products.

“We’re viewed as still ‘these pieces of either acquisitions or products or things that we’ve done over the past’ but we’re actually bringing it together,” said PayPal CEO Alex Chriss at the investor event.

These updates follow a strong second quarter where total payment volume exceeded expectations, rising 11% year-over-year to $363 billion. However, net new active user additions came in below estimates.

As part of its performance improvement plan, PayPal is aiming to grow its earnings 20% by 2027. The company also plans to make PYUSD a direct payment option on its Hyperwallet platform, which it acquired in 2018 for $400 million, before the end of the second quarter.

Hyperwallet specializes in facilitating mass payments to contractors, freelancers, and sellers globally.

PYUSD's entry into mainstream business applications marks a significant step in expanding the stablecoin's use cases beyond cryptocurrency-related transactions.

Earlier this year, the company announced that it had completed its first PYUSD transaction with a merchant, a milestone reached just one year after unveiling its plans for the stablecoin.

These developments come as stablecoin legislation in the U.S. appears to be gaining clarity, with observers noting that clearer regulations could lead to thousands more entrants in this space.

Following the investor day announcements, PayPal’s stock (PYPL) rose 4.7% in pre-market trading, reaching $77.57 from the previous close of $74.07.