PayPal Expands PYUSD Stablecoin to Stellar Blockchain Targeting Cross-Border Payments and New Financing Tools

PayPal is adding its PYUSD stablecoin to the Stellar blockchain in a move to boost its role in cross-border payments and unlock new financing capabilities for small businesses, according to a joint announcement Wednesday.

The expansion marks PYUSD’s third blockchain integration after Ethereum and Solana.

According to the companies, the collaboration will facilitate faster and more efficient access to working capital, which is particularly crucial for small and mid-sized businesses (SMBs) that often face delays in receivables or need to pre-fund payments to suppliers.

Instead of waiting several days for traditional payment systems to settle, businesses can receive PYUSD on Stellar immediately, enabling them to rapidly pay suppliers, manage inventory or handle other operational expenses.

“We are pleased to be working with Stellar to integrate PARA Stablecoin into the Stellar network,” said May Zabaneh, vice president of blockchain and digital currencies at PayPal.

“This integration will help advance the use of this technology and provide benefits for all users. We are committed to working with best-in-class partners like Stellar to bring forth new use cases and services that will unlock the full potential of blockchain technology.”

Stellar is renowned for its low-cost and rapid-settlement network and has a strong focus on cross-border remittances and financial inclusion.

For PayPal, the move signals a broader push into cryptocurrencies and blockchain technology not only as trading instruments but also as core components of its global payments infrastructure.

The integration has been approved by the New York Department of Financial Services, with final steps pending before the launch.

Earlier in April, the U.S. Securities and Exchange Commission (SEC) closed its investigation into PayPal’s dollar-backed stablecoin without taking any further action.

The SEC has been probing the launch of PYUSD and if the payments giant should have registered the token with the agency.

The regulator began its inquiry with a subpoena issued in November 2023, requesting documents related to the creation and operation of the stablecoin.

PayPal launched PYUSD in August 2023 through a third-party issuer and has been expanding the token’s use cases.

The stablecoin has struggled to gain traction against market leaders Tether (CRYPTO: USDT) and Circle's (NYSE:COIN) USDC, with a current market cap of $879.9 million.

In comparison, USDT stands at $148.4 billion and USDC at $62 billion.

The disclosure comes shortly after PayPal and Coinbase (NASDAQ:COIN) announced a partnership to waive trading fees on PYUSD.

Coinbase is now offering zero-fee trading on PYUSD, enabling users to buy, sell, and redeem the stablecoin on the exchange without any platform charges.

The partnership also allows for seamless conversion of PYUSD to U.S. dollars at a 1:1 rate.

Coinbase previously reserved this zero-fee treatment for only one stablecoin—Circle's USDC, the second-largest stablecoin by market value.

In May, PayPal launched PYUSD on Solana (CRYPTO: SOL), marking the token’s second blockchain integration after its initial deployment on Ethereum.

PYUSD is now available for withdrawal on Solana in the same manner as other Solana tokens, and users can seamlessly transfer it to any Solana wallet.

The move follows reports that suggested PayPal was planning to expand the token’s use cases in preparation for the launch of its own Web3 wallet later in 2024.

PayPal is also partnering with Anchorage Digital to create a reward system for users who hold PYUSD in their digital assets company accounts.

The partnership will introduce a unique loyalty program, allowing small and mid-sized businesses (SMBs) to earn points for every dollar they spend using PARA Stablecoin for their trade finance needs.

These points can be redeemed by businesses for various benefits, such as additional services from Anchorage or other brands within the program.

Moreover, PayPal has teamed up with MoonPay to provide greater flexibility in payment methods for purchasing PYUSD.

The collaboration aims to resolve issues related to declined crypto purchases via debit card and improve the success rate of such transactions, even when using the same debit card.

This integration will also enable existing PayPal users to seamlessly transfer funds from their PayPal account to MoonPay for buying cryptocurrencies without needing to manually input their card details.