PayPal (PYUSD) Expands Use of Its Flagship Stablecoin Across Its Platform

Payments giant PayPal is looking to scale the use of its flagship stablecoin, PayPal USD (PYUSD), across its platform throughout 2025, according to a recent report from Bloomberg.

Payments giant PayPal is planning to scale the use of its flagship stablecoin, PayPal USD (PYUSD), across its platform throughout 2025, aiming to create a unified ecosystem that fulfills all merchant needs within a single, comprehensive platform.

The move is part of PayPal’s broader strategy to become a leading provider of innovative and efficient payment solutions for businesses of all sizes.

By the end of this year, PayPal will launch a new bill-pay feature that will allow its over 20 million small-to-medium sized merchants to pay their vendors using PYUSD, Michelle Gill, Executive Vice President and General Manager of PayPal’s Small Business and Financial Services Group, revealed at the time.

Gill expects the initiative to encourage vendors to join the PayPal network, simplifying transactions and reducing processing times for both parties.

"We're also going to be launching bill pay for our merchants to be able to use PYUSD to pay their vendors, which we expect to launch by the end of the year," Gill said.

PayPal's U.S. dollar-pegged stablecoin is expected to be a key focus in facilitating cross-border payments, as many U.S. merchants pay suppliers abroad.

The payments giant aims to leverage PYUSD to streamline cross-border payments for U.S. merchants, reducing transaction friction and speeding up payment times, ultimately creating a more efficient and cost-effective payment process for international business.

"We're going to be launching the ability for U.S. merchants to accept cross-border payments in PYUSD early next year, and we're also going to be launching the capability for merchants to use cryptocurrencies to settle their PayPal checkout transactions by the end of 2025," Gill added.

PYUSD will also be integrated into Hyperwallet, PayPal's mass payment platform. The company aims to enable businesses to send payments to contractors, freelancers, and sellers globally with increased efficiency.

For the payments giant, only practical use matters; the real worth of blockchain comes from its ability to solve actual problems and improve real-life situations.

PayPal's initiatives, such as integrating PYUSD into its payment systems, are a way to put blockchain technology into practice, according to Alex Chriss, CEO of PayPal.

"The interesting thing about blockchain is that it can be used to solve real problems and improve existing workflows," Chriss said.

PYUSD's Market Capitalization Declines Amid Market-Wide Pullback

Launched by PayPal in August 2023 on the Ethereum blockchain, PYUSD is a stablecoin that aims to provide a stable and efficient means of exchange within the PayPal ecosystem.

Later, in May, PayPal announced the expansion of its stablecoin, PYUSD, onto the Solana blockchain, aiming to leverage Solana's high transaction speed and efficiency for payments-focused applications.

The stablecoin has seen strong adoption since its launch, with CoinGecko data revealing that PYUSD reached a market capitalization of over $1 billion by December 2024.

The adoption can be attributed to several factors, including PYUSD's accessibility to over 100 million users in the U.S. through PayPal and Venmo.

Additionally, PYUSD can be used for fee-free cross-border payments via Xoom, further reducing transaction costs and providing a seamless experience for global users.

The integration on Solana has more than doubled PYUSD's circulation, with over 60% now on Solana, catering to the network's strengths in high-throughput and low-latency applications.

While PYUSD benefits from PayPal's vast user base, it may need to enhance its features or partnerships to remain competitive in the cross-border payment space and expand its footprint.

The stablecoin still needs to expand its reach and utility to compete effectively with dominant stablecoins like USDT and USDC.

Tether currently takes the largest share of the stablecoin market, with a market cap of $142 billion, followed by USDC with around $56 billion.

PYUSD's market cap, currently around $703 million, places it tenth among stablecoins.

The stablecoin recently saw its market capitalization fall from $772 million as a result of a widespread market correction, which saw a staggering $300 billion wiped from the overall cryptocurrency market since Monday.

The arrival of new stablecoins that focus on cross-border settlements like RLUS, Ripple's stablecoin, may also pose challenges for PYUSD.

However, PayPal's stablecoin still benefits from being fully backed by U.S. dollar deposits and short-term U.S. Treasuries, offering a high level of regulatory compliance and stability.

In November, PYUSD was integrated into LayerZero, a cross-blockchain bridging protocol, to facilitate transfers between the Ethereum and Solana blockchains using the Omnichain Fungible Token Standard.

The integration aims to enable seamless crypto transfers without relying on centralized