PayPal USD (PYUSD) Plans to Use Stellar for New Use Cases

Rhea-AI Summary

PayPal (PYPL) announced plans to expand its PYUSD stablecoin to the Stellar blockchain network, pending NYDFS regulatory approval. This strategic move aims to leverage Stellar's fast, low-cost payment infrastructure to enhance PYUSD's utility for real-world payments, commerce, and micro-financing across 170+ countries. The integration would enable improved cross-border payments, daily payment options, and innovative financing solutions like 'PayFi' for small businesses. Through Stellar's infrastructure, PYUSD users would gain access to extensive on and off ramps, digital wallets, and local payment systems. The expansion focuses on transforming stablecoins into practical financial tools for everyday users and merchants, particularly in emerging markets.

Positive

• Expansion to Stellar network would provide access to 170+ countries, significantly expanding PYUSD's global reach
• Integration enables fast, low-cost cross-border payments and enhanced access to financial services
• New 'PayFi' feature would provide real-time working capital solutions for small businesses
• Access to Stellar's extensive infrastructure of on/off ramps and local payment systems

Negative

• Implementation subject to regulatory approval from NYDFS
• External wallet holders lack guaranteed access to 1:1 USD redemption mechanism
• Potential risks related to network security, custody, and market fluctuations
• No FDIC/SIPC protection for digital assets including PYUSD

Insights

Blockchain Technology Specialist

PayPal's PYUSD expansion to Stellar network enables real-world payment applications and broader global reach, strengthening its blockchain strategy.

PayPal's planned expansion of PYUSD to the Stellar blockchain represents a strategic evolution in its stablecoin approach. By adding Stellar alongside Ethereum and Solana, PayPal is diversifying its blockchain infrastructure while specifically targeting practical payment applications.

The Stellar network offers distinct advantages for PYUSD implementation: faster transaction processing, significantly lower fees (fractions of a cent versus dollars on Ethereum), and established payment corridors in 170+ countries. These characteristics directly address the primary limitations that have historically prevented stablecoins from achieving mainstream adoption for everyday transactions.

What's particularly notable is the focus on "PayFi" - payment financing solutions that leverage blockchain for working capital and business loans. This positions PYUSD not merely as a speculative digital asset but as functional financial infrastructure for small businesses in emerging markets. The potential for real-time working capital disbursement with instant settlement represents a significant improvement over traditional financing mechanisms that typically involve days of settlement delays.

The integration with Stellar's extensive on/off ramp network - connecting to local payment systems and cash networks - directly addresses the critical "last mile" problem in cryptocurrency adoption. This infrastructure enables practical conversion between digital and physical currencies, essential for meaningful adoption in diverse economic environments.

This expansion significantly broadens PayPal's blockchain utility beyond crypto trading toward embedded financial services. While regulatory approval from NYDFS remains pending, this move aligns with PayPal's broader strategy of transitioning from payment processor to comprehensive digital financial services provider.

Financial Services Analyst

This strategic expansion of PYUSD to the Stellar network marks PayPal's deepening commitment to blockchain-based financial infrastructure. The move targets specific high-value use cases rather than general cryptocurrency speculation.

Cross-border payments represent a $156 trillion global market plagued by high fees and slow settlement times. By leveraging Stellar's infrastructure, PayPal positions PYUSD to capture market share in this segment while addressing fundamental inefficiencies. The ability to facilitate near-instant settlement at minimal cost creates tangible competitive advantages against traditional remittance providers and banking networks.

The "PayFi" component reveals PayPal's broader fintech ambitions. By enabling real-time working capital solutions through PYUSD, PayPal is entering the embedded finance space - allowing capital to flow precisely when and where businesses need it. This represents an evolution from basic payment processing to more sophisticated financial services with higher margins.

The expansion gives PayPal multiple technical options for PYUSD deployment, creating flexibility to optimize for different use cases: Ethereum for DeFi integration, Solana for consumer applications requiring speed and low fees, and now Stellar for global payment infrastructure and emerging market access.

Regulatory considerations remain crucial. The pending NYDFS approval highlights the compliance-focused approach PayPal is taking, maintaining regulatory relationships while pushing innovation boundaries. This balanced approach reduces regulatory risk compared to more aggressive competitors.

This development should be viewed as part of PayPal's broader strategy to create an integrated digital financial ecosystem spanning traditional payment processing, cryptocurrency services, and now blockchain-based financing solutions - significantly expanding its addressable market beyond traditional payment processing.

To extend everyday payments, remittances, and 'PayFi' solutions to millions of users and merchants

NEW YORK, June 11, 2025 /PRNewswire/ -- PayPal today announced plans to make the PayPal USD (PYUSD) stablecoin available on the Stellar network pending regulatory approval by the New York State Department of Financial Services (NYDFS)¹. Stellar is a blockchain designed for fast, low-cost payments and real-world utility. By potentially expanding to Stellar, PYUSD leverages the network's speed, low transaction costs, and ease of integration to enhance its utility for real-world payments, commerce, and micro-financing, offering an additional option to Ethereum and Solana.

PYUSD on Stellar can be used for fast, affordable cross-border payments and expanded access to essential financial services while bridging the digital and physical world with a vast array of on and off ramps. Users may also benefit from improved daily payment options and financing solutions such as working capital and business loans - use cases already thriving on the Stellar network - ultimately enabling a more seamless flow of value across global markets.

"For years, stablecoins have been deemed crypto's 'killer app' by combining the power of the blockchain with the stability of fiat currency. As we see cross border payments being a key area where digital currencies can provide real world value, working with Stellar will help advance the use of this technology and provide benefits for all users," said May Zabaneh, Vice President of the Blockchain, Cryptocurrency, and Digital Currency Group, PayPal.

An expansion on Stellar would give PYUSD users access to its vast network of on and off ramps, providing additional access through digital wallets, and connected to local payment systems and cash networks. Access to extensive Stellar infrastructure will enhance how people can use PYUSD in their everyday financial activities, from payments to remittances to merchant services.

"Stellar is the network for fast, low-cost, and trusted global payments at scale. By bringing PYUSD to 170+ countries, we're transforming stablecoins into practical financial tools that millions of everyday users and merchants can actually use," shared Denelle Dixon, Chief Executive Officer of Stellar Development Foundation. "Together, we are bringing stable digital currency to small businesses and individuals in emerging markets all over the globe."

PYUSD on Stellar can also enhance liquidity and financing opportunities through Payment Financing or 'PayFi', an emerging innovation in digital finance. Small and medium-sized businesses that face delayed receivables or pre-funding requirements would be able to access new sources of real-time working capital, disbursed in PYUSD. This capital can be used to pay suppliers, manage inventory, or address other operational needs – with instant settlement on Stellar. Liquidity providers can fund these opportunities and earn potential, sustainable benefits from real-world economic activity. 

PYUSD on Stellar can drive efficient modernized money movement, cost transparency, and minimize settlement delays by unlocking better borderless financial flows.

IMPORTANT DISCLOSURES 

This press release is for informational purposes only and is not intended as financial, investment or other advice. The use and exchange of digital assets, including stablecoins such as PYUSD, may involve complex risks, including but not limited to: 

• Network & Custody Risks: Transactions on blockchains – and the blockchains themselves – are subject to a range of operational, technological, and security risks. Users are responsible for safeguarding their private keys and/or working with reputable custodians/wallet providers; loss of access may lead to the permanent loss of funds. 
• Third-Party Reliance: Digital assets rely on third-party blockchain software and network infrastructure. Neither PayPal nor Paxos Trust Company, LLC ("Paxos") has control over blockchain networks and is not liable for any blockchain's performance, security, or ongoing availability. 
• Redemption and Market Risk of Fiat-Backed Stablecoins:
  While PYUSD is designed to maintain a stable value of one U.S. dollar per token, this stability is not guaranteed in all circumstances. While PayPal, Paxos, and select partner account holders may be able to redeem PYUSD at one U.S. dollar, individuals or entities that hold PYUSD in external self-custody wallets or on third-party platforms do not have guaranteed access to this redemption mechanism. As a result, individuals or entities without access to direct redemption may be limited to selling PYUSD at market prices, which can fluctuate, potentially materially at times, above or below one U.S. dollar.  
• Regulatory Uncertainty: Regulatory frameworks for digital assets are evolving. Availability or legality of digital asset services may change without notice, and services may be restricted, suspended, or terminated in certain jurisdictions as required by law or regulation. 
• No FDIC/SIPC Protection: Digital assets, including PYUSD, are not insured by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC). 
• Terms & Conditions: Use of PYUSD is subject to Paxos and PayPal's Terms & Conditions, including disclaimers to liability and user responsibilities. Transactions are irreversible once recorded on the blockchain. You are advised to review and understand all applicable terms. 
• Service Availability & Illegal Activity: PYUSD and related payment services may be suspended or terminated due to events or investigations involving illegal activity, system failure, or other factors beyond PayPal's control. 
• Forward-Looking Statements: Statements in this press release regarding potential product features, expansion plans, and regulatory outcomes are forward-looking and subject to change. Actual results may differ materially due to known and unknown risks, uncertainties, and other factors. 

About PayPal USD (PYUSD)
PayPal USD is issued by Paxos Trust Company, a fully chartered limited purpose trust company. Paxos is licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services. Reserves for PayPal USD are fully backed by U.S. dollar deposits, U.S. Treasuries and similar cash equivalents, and PayPal USD can be bought or sold through PayPal and Venmo at a rate of $1.00 per PayPal USD.

PayPal, Inc. (NMLS ID #: 910457) is licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services.

The Stellar Network
The Stellar network is a decentralized, fast, scalable, and uniquely sustainable blockchain built for financial products and services. It offers builders smart contracts functionality, and a protocol optimized for payments, with a design intended to keep fees low and to provide transaction speeds that can scale with increased adoption. Financial institutions and innovators worldwide issue assets and settle payments on the Stellar network, which has processed billions of operations with millions of accounts since the network was first launched.

¹ Any materially new product, service, or activity requires approval from the NYDFS. As of June 11, 2025, the NYDFS has not provided any such approval.

Contact: Media Relations, mediarelations@paypal.com 

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SOURCE PayPal Holdings, Inc.

FAQ

What is PayPal's plan for PYUSD expansion on the Stellar network?

PayPal plans to make PYUSD available on the Stellar blockchain network to enable fast, low-cost payments and expand access to financial services across 170+ countries, pending NYDFS regulatory approval.

How will PYUSD on Stellar benefit small businesses?

Small businesses will gain access to real-time working capital through 'PayFi', enabling instant settlement for supplier payments, inventory management, and operational needs.

What are the key features of PYUSD on the Stellar network?

Key features include fast and low-cost cross-border payments, extensive on/off ramps, digital wallet integration, local payment system access, and innovative financing solutions.

What risks are associated with PYUSD on Stellar?

Risks include network and custody security concerns, lack of FDIC/SIPC protection, potential market fluctuations, and limited redemption access for external wallet holders.

How will this expansion affect PayPal's global payment infrastructure?

The expansion will enhance PayPal's global payment capabilities by enabling faster, cheaper cross-border transactions and providing better access to financial services in emerging markets.