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PayPal has announced plans to make its US dollar-pegged stablecoin, PayPal USD (PYUSD), available on the Stellar blockchain, pending regulatory approval from the New York State Department of Financial Services. The move is designed to extend everyday payments, remittances, and new ‘PayFi’ financing solutions to millions of users and merchants worldwide.
Stellar is a blockchain specifically built for fast, low-cost payments and real-world utility. If approved, the integration would make Stellar the third blockchain supporting PYUSD, alongside Ethereum and Solana. The decision to leverage Stellar’s infrastructure is intended to enhance the utility of PYUSD for real-world payments, commerce, and micro-financing, as well as to offer additional options for users seeking speed and low transaction costs.
May Zabaneh, Vice President at PayPal
“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.
The integration is expected to allow PYUSD users to access Stellar’s extensive network of on and off ramps, connecting digital wallets to local payment systems and cash networks in more than 170 countries. This could provide additional access points for users and merchants, making it easier to use PYUSD for daily financial activities, from payments and remittances to merchant services.
Denelle Dixon, Chief Executive Officer of Stellar Development Foundation, commented: “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. Together, we are bringing stable digital currency to small businesses and individuals in emerging markets all over the globe.”
One of the key innovations highlighted is the potential for PYUSD on Stellar to support Payment Financing, or ‘PayFi’. This would enable small and medium-sized businesses facing delayed receivables or pre-funding requirements to access real-time working capital, disbursed in PYUSD, with instant settlement on Stellar. Liquidity providers could fund these opportunities and earn potential, sustainable benefits from real-world economic activity.
Industry observers have noted the significance of the move. Crypto analyst Tom Shaughnessy commented on X, “PayPal choosing Stellar shows the growing importance of low-cost, high-speed blockchains for real-world payments. This could be a game-changer for cross-border commerce.” Meanwhile, fintech commentator Maya Zehavi remarked, “Stellar’s focus on practical payments and remittances makes it a natural fit for a mainstream stablecoin like PYUSD.”
PayPal’s expansion into Stellar is seen as part of a broader strategy to evolve from a traditional payment processor to a comprehensive provider of embedded financial services, particularly as stablecoins gain traction as tools for global payments and liquidity solutions.
The company has emphasised that the expansion is subject to regulatory approval and has issued a series of disclosures regarding the risks associated with digital assets, including network and custody risks, third-party reliance, market risk of fiat-backed stablecoins, regulatory uncertainty, and the absence of FDIC or SIPC protection. Users are advised to review all applicable terms and conditions before engaging with PYUSD on any blockchain.
