PayPal plans to integrate its PYUSD stablecoin with its other products throughout 2025, using its competitive edge of 20 million merchants to compete with other stablecoins like Tether (USDT). Michelle Gill, general manager of PayPal’s small business group, said the goal of the stablecoin was to encourage merchants to invite their vendors into the network and promote faster transactions. “A lot of the payments we’re expecting”, wrote Gill, “are going to be cross-border because merchants in the US are seeking to pay vendors and suppliers abroad. The thesis was: Can we facilitate that on PYUSD rails so as not to have the currency conversion, the friction, as well as time”? Merchants currently face many fees and delays when buying from suppliers online. The fees mainly come from currency conversion, making the process of business cumbersome and expensive. PayPal’s stablecoin could solve this problem by providing a single token that merchants can use without the hassle of constantly exchanging currency. PayPal wants to expand PYUSD to include cross-blockchain functionality. Currently, the token is accessible on Cardano due to Wanchain’s cross-chain capabilities. Access to blockchains will allow PYUSD to be used to make digital payments online. PayPal wishes to expand upon this ability by removing more restrictions for merchants. In August 2023, PayPal launched PYUSD on the Ethereum blockchain. In May 2024, PayPal expanded its network to Solana to take advantage of faster speeds and lower transaction fees. PYUSD has already impacted the cryptocurrency space, having a market cap of $1 billion in December 2024. The stablecoin already has many applications. The boost in market cap is attributable to the 100 million users in the U.S. market, using services like PayPal and Venmo, but also including other applications, such as the fee-free cross-border payment app Xoom, adding further exposure to the stablecoin. PayPal further acquired Hyperwallet, specifically to target online payments. Clients can pay freelancers and contractors from across the globe using the stablecoin PYUSD to cut down on costs and red tape. Integrating a stablecoin into PayPal’s established business challenges the dominance of traditional banks. “We’ve been talking about blockchains for like a decade now”. Said Alex Chriss, President of PayPal. “The concept of these things never becomes real until you actually can start to spend it”. The financial services company Hyperwallet was acquired by PayPal for $400 million in 2018. PayPal expects to handle payouts in mid-2025 using the PYUSD token. Meanwhile, the Ripple stablecoin RLUSD boasts a $120 million supply and operates on Ethereum and Ripple networks. Due to the extra market exposure from PYUSD, the extra boost in stablecoins may affect the Bitcoin price in the short term, placing extra pressure on the cryptocurrency and boosting supply.
