PayPal is accelerating efforts to broaden the use of its U.S. dollar-backed stablecoin, PYUSD, with the goal of integrating 20 million merchants into its ecosystem by the end of 2025.
During its investor day in New York, company executives highlighted the stablecoin’s transition from an experimental phase to a more expansive business application. Although PYUSD is accessible through PayPal and Venmo, its adoption has primarily remained within crypto communities. Now, PayPal is pushing to make it a mainstream payment tool.
One of the company’s key initiatives includes incorporating PYUSD into its bill-pay product, allowing merchants to use it for vendor payments. This feature is expected to launch later this year and will enable merchants to “invite” vendors into the PayPal network for seamless transactions. According to reports from Bloomberg and Fortune, this move aims to streamline payments by reducing currency conversion barriers and transaction delays.
“The thesis was: Can we facilitate that on PYUSD rails so as not to have the currency conversion, the friction, as well as time?” said Michelle Gill, general manager of PayPal’s small and medium enterprises line of business, in an interview with Bloomberg.
Last year marked a significant milestone for the company, as it completed its first PYUSD business transaction just a year after introducing the stablecoin. These advancements coincide with ongoing regulatory discussions in the U.S., with analysts suggesting that clearer legislation could encourage wider participation in the stablecoin sector.
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PayPal CEO Alex Chriss emphasized during the event that while the company has often been perceived as a collection of acquisitions and products, it is actively working to integrate these offerings into a more cohesive system. This initiative aligns with PayPal’s broader strategy to enhance user experience across its platforms.
Beyond merchant payments, the company is also looking to expand the role of its Hyperwallet platform, which it acquired in 2018 for $400 million. Hyperwallet facilitates large-scale payouts to freelancers, contractors, and sellers worldwide. PayPal aims to introduce PYUSD as a direct payment option on the platform by the end of the second quarter.
This mass payout functionality reflects a growing trend in the industry, similar to the approach taken by Bridge, a stablecoin infrastructure provider recently acquired by Stripe. Bridge has already secured major clients, including U.S. Aid, to streamline international payments.
Cross-border transactions represent another crucial aspect of PayPal’s PYUSD strategy. The company seeks to address the challenges faced by U.S. merchants in paying international vendors by eliminating currency conversion complexities and accelerating payment processing times.
As PayPal moves forward with these initiatives, it continues to position PYUSD as a key player in the evolving stablecoin landscape, aiming to bridge the gap between traditional finance and digital assets.
What is PYUSD?
PYUSD (PayPal USD) is a stablecoin issued by PayPal in partnership with Paxos. It is pegged 1:1 to the US dollar and is backed by US dollar deposits, short-term US Treasuries, and other cash equivalents.
Key Features:
- Issued by Paxos (a regulated blockchain infrastructure company).
- Backed by USD (fully backed by reserves).
- Built on Ethereum (ERC-20 token).
- Use Cases:
- Payments & transfers within PayPal and compatible wallets.
- DeFi (Decentralized Finance) applications.
- Crypto trading and conversions.
It provides an easy way for PayPal users to interact with cryptocurrencies while maintaining price stability.
