PayPal Expands PYUSD Stablecoin to Stellar Blockchain

PayPal’s stablecoin PYUSD could be expanding to the Stellar network, specifically designed for payments, especially cross-border, according to a report by Stellar. This is subject to receiving regulatory approval from the New York Department of Financial Services (NYDFS).

The stablecoin, already available on Ethereum and Solana with a market capitalization just shy of a billion dollars and one of the wallets having a balance of more than $300 million (either Paxos's or more likely the cumulative PYUSD tokens held within PayPal wallets), is also being used outside the PayPal wallet for DeFi and other use cases.

This expansion to Stellar makes strategic sense given the network’s existing infrastructure. For cross border payments Stellar already has a strong network for on and off-ramps. Plus, PayPal highlighted that Stellar supports certain financing and business loan applications which could benefit users.

"We are thrilled to welcome PYUSD to the Stellar network," said Stellar Development Foundation CEO Denelle Dixon. "By bringing PYUSD to 170+ countries, we’re transforming stablecoins into practical financial tools that millions of everyday users and merchants can actually use. Together, we are bringing stable digital currency to small businesses and individuals in emerging markets over the globe."

This NYDFS approval requirement stems from PayPal’s regulatory approach. By opting to partner with Paxos, a New York regulated trust company, it is more tightly regulated compared to stablecoin issuers such as Circle that have a virtual currency and money transmitter license. Hence, it needs to get approval for each new blockchain. To our knowledge, NYDFS has only approved Ethereum and Solana to date for trust-based stablecoins. It added Solana at the end of 2023.