Key Takeaways
- Global Payments Push: PayPal plans to bring its PYUSD stablecoin to Stellar, targeting 170+ countries for remittances and merchant payments.
- $1B Milestone Near: PYUSD’s market cap approaches $1 billion, with one wallet holding over $300M in reserves.
- Compliance Challenges: Expansion requires NYDFS approval – currently, only Ethereum and Solana are greenlit for Paxos-issued stablecoins.
- Small and Medium Enterprise (SME) Financing Boost: Stellar integration could enable real-time “PayFi” working capital solutions for small businesses.
PayPal’s Stablecoin Goes Multi-Chain
PayPal isn’t just taking one step into crypto, but making a plunge instead. The payments giant announced its intention to launch its PYUSD stablecoin onto the Stellar blockchain when regulatory approval is granted. PYUSD was already live on Ethereum and Solana, but now its debut on Stellar aims to take advantage of Stellar’s five-second settlement times and sub-penny fees to make cross-border payments faster, cheaper, and more efficient.
The announcement came out in a press release from both sides through their official websites, and on X:
A key point is that Stellar could also transform stablecoins from speculative assets into practical tools for small businesses and migrant workers.
Why Stellar? Speed Meets Scale
1. Cheaper, Faster Remittances
Stellar’s infrastructure slashes costs for $860B+ in annual global remittances. A $200 transfer that costs $12 on PayPal today could drop to $0.01 on-chain.
2. SME Liquidity Lifeline
The partnership introduces “PayFi”, a new model where:
- Suppliers get instant PYUSD payments instead of waiting 30+ days for invoices.
- Liquidity providers earn yield by funding these transactions.
3. On-Ramp Ecosystem
Stellar’s existing partnerships with MoneyGram and Flutterwave give PYUSD instant access to cash outlets in emerging markets.
The Compliance Roadblock
PYUSD’s expansion hinges on NYDFS approval, with no guarantee, given regulators’ cautious stance. Notably:
- Paxos (PYUSD’s issuer) operates under stricter trust company rules than rivals like Circle.
- NYDFS has only approved Ethereum and Solana for Paxos stablecoins to date.
A rejection could force PayPal to rethink its multi-chain strategy.
Market Impact
- XLM Price Reaction: Stellar’s native token (XLM) may get a substantial surge post-announcement.
- Stablecoin Wars: PYUSD’s growth threatens USDC and USDT dominance in payments.
- DeFi Integration: Expect PYUSD pools on Stellar DEXs like Strobe.
What’s on the Horizon?
If approved, PYUSD on Stellar could go live by Q3 2025. Success would validate stablecoins as more than crypto trading pairs; they’d become global payment rails.
Final Thought: Can traditional finance and blockchain finally merge at scale, or will regulators pump the brakes? The current crypto market looks greener than ever, and institutional adoption is pushing harder on low-risk investments like USD-paired tokens.
For more stablecoin-related news, read: Societe Generale Makes Banking History with First Public Stablecoin: USDCV
