PayPal is taking a major step in its digital currency strategy by expanding its PayPal USD (PYUSD) stablecoin to the Stellar blockchain. This integration marks a strategic move to strengthen PayPal’s role in cross-border payments and unlock innovative financial tools for small and medium-sized enterprises (SMEs).
As PYUSD’s third blockchain integration—following deployments on Ethereum and Solana—the expansion to Stellar aims to enhance real-time access to working capital, especially for businesses facing delayed receivables or requiring upfront funding. The move aligns with growing demand for faster, more efficient payment rails that can support global commerce without the friction of traditional banking systems.
👉 Discover how stablecoins are transforming global business payments
Instant Settlements for SMEs
The core benefit of integrating PYUSD with Stellar lies in speed and cost-efficiency. Instead of waiting days for payments to clear through conventional banking channels, businesses can now receive PYUSD instantly on the Stellar network. Once received, these funds can be immediately used to pay suppliers, manage inventory, or cover operational costs—streamlining cash flow in ways previously unavailable to many small businesses.
Stellar’s reputation for low transaction fees and rapid settlement makes it an ideal platform for this use case. With average transaction costs under $0.01 and confirmation times of just 3–5 seconds, Stellar provides the scalability needed for high-volume, cross-border transactions.
May Zabaneh, Vice President of Blockchain and Digital Currencies at PayPal, emphasized the broader vision: “Our collaboration with Stellar helps drive real-world adoption of blockchain technology and benefits users everywhere.” She noted that stablecoins remain one of the most practical applications in crypto today—offering the speed of blockchain with the price stability of fiat currencies.
Regulatory Approvals and Market Position
The integration has already received approval from the New York Department of Financial Services (NYDFS), a key regulatory milestone. Final deployment is pending additional review, but the green light signals growing institutional confidence in stablecoin technology.
This development follows the U.S. Securities and Exchange Commission (SEC) closing its investigation into PYUSD in April 2025. The probe, initiated via subpoena in late 2023, sought documents related to PYUSD’s launch and operations but did not result in enforcement action. The closure reinforces PYUSD’s standing as a compliant, transparent digital dollar.
Despite regulatory clarity, PYUSD still trails behind dominant players like Tether (USDT) and Circle’s USDC in market adoption. As of 2025, PYUSD holds a market capitalization of $1.48 billion, compared to USDT’s $879.9 billion and USDC’s $62 billion. However, PayPal’s extensive user base—over 430 million accounts globally—positions it uniquely to accelerate PYUSD’s reach.
Strategic Partnerships Driving Adoption
To boost utility and accessibility, PayPal has formed key partnerships across the crypto ecosystem. A notable collaboration with Coinbase allows users to buy, sell, and convert PYUSD on the exchange with zero platform fees. Additionally, PYUSD can be converted to U.S. dollars at a 1:1 ratio, enhancing liquidity and trust.
Coinbase previously reserved fee-free treatment for only one stablecoin: USDC, the second-largest by market cap. Extending this privilege to PYUSD underscores its growing legitimacy and signals strong institutional backing.
Further expanding access, PayPal partnered with MoonPay to offer more payment methods for purchasing PYUSD. This integration addresses a common pain point: declined crypto purchases via debit cards. According to MoonPay, their system improves transaction success rates even when using the same card that might otherwise be rejected on other platforms.
Existing PayPal users benefit from seamless onboarding—no need to manually re-enter card details when buying crypto through MoonPay. This frictionless experience lowers barriers to entry and encourages wider participation in digital asset markets.
👉 See how seamless crypto onboarding boosts user adoption
Why Stellar Makes Strategic Sense
Stellar’s long-standing focus on financial inclusion and remittances complements PayPal’s mission to democratize financial services. Both platforms prioritize affordability and accessibility, making them natural allies in the push for global payment innovation.
For PayPal, this integration isn’t just about launching another blockchain version of its stablecoin—it's about reimagining how money moves across borders. By leveraging Stellar’s infrastructure, PayPal can offer near-instant settlements without sacrificing compliance or security.
Moreover, the partnership opens doors for future innovations such as programmable payments, embedded finance solutions, and decentralized lending protocols tailored for SMEs.
Frequently Asked Questions (FAQ)
Q: What is PYUSD?
A: PYUSD (PayPal USD) is a U.S. dollar-pegged stablecoin issued by Paxos Trust Company and backed 1:1 by reserve assets. It enables fast, secure digital transactions across supported blockchains.
Q: Why did PayPal choose Stellar for PYUSD expansion?
A: Stellar offers low-cost, high-speed transactions with strong scalability—ideal for cross-border payments and real-time business settlements. Its mission aligns with PayPal’s goals of financial inclusivity and efficient global transfers.
Q: Is PYUSD safe to use?
A: Yes. PYUSD is regulated by the New York Department of Financial Services and undergoes regular audits. It maintains full reserve backing and has passed SEC scrutiny without enforcement action.
Q: Can I convert PYUSD back to U.S. dollars?
A: Absolutely. PYUSD can be redeemed 1:1 for U.S. dollars through authorized platforms like PayPal and Coinbase, ensuring liquidity and stability.
Q: How does this affect small businesses?
A: Businesses gain immediate access to working capital via instant settlements on Stellar. This reduces reliance on slow bank transfers and helps manage cash flow more effectively.
Q: Where else is PYUSD available besides Stellar?
A: PYUSD is also live on Ethereum and Solana blockchains, offering users flexibility across multiple ecosystems.
The expansion of PYUSD to Stellar represents more than a technical upgrade—it's a strategic evolution in how digital money can serve real-world economic needs. With faster settlements, lower costs, and growing institutional support, PYUSD is positioning itself as a credible player in the future of global finance.
As adoption grows, expect to see deeper integrations with DeFi platforms, payroll systems, and supply chain financing tools—all powered by the combination of PayPal’s reach and Stellar’s efficiency.