PayPal's stablecoin is nearing a market capitalization of 1 billion USD, awaiting NYDFS approval to expand into cross-border payment networks.
Today, PayPal announced plans to expand the deployment of the PYUSD stablecoin on the Stellar network – a blockchain specifically designed for payments, particularly cross-border payments. However, this plan depends on receiving a license from the New York State Department of Financial Services (NYDFS), reflecting PayPal's strict legal compliance approach.
Currently, the PYUSD stablecoin is available on the Ethereum and Solana blockchains with a total market capitalization nearing 1 billion USD. One wallet holding PYUSD has a balance of over 300 million USD, which may reflect assets held by PayPal or Paxos, or likely the total amount of PYUSD tokens being held in PayPal's internal wallets.
PYUSD is not only used within the PayPal ecosystem but can also be traded on DeFi platforms and external applications. The expansion to Stellar is seen as a strategic move, as this network already has robust infrastructure supporting cross-border payments, including global on-ramps and off-ramps.
Global expansion potential
PayPal emphasizes that Stellar supports financial applications such as business funding and business loans, which can provide practical value to users. Denelle Dixon, CEO of Stellar Development Foundation, shared: “By bringing PYUSD to over 170 countries, we are turning stablecoin into a practical financial tool that millions of users and merchants can use daily.”
Ms. Dixon also emphasized: “Together, we are bringing stable digital currency to small businesses and individuals in emerging markets around the world.” This shows the vision to expand into developing markets, where there is high demand for efficient cross-border payments.
The request for approval from NYDFS stems from PayPal's strict legal compliance approach. Collaborating with Paxos – a licensed trust company in New York – means that PYUSD is subject to stricter oversight than stablecoin issuers like Circle, which only have virtual currency and money transfer licenses.
Therefore, each time PYUSD is expanded to a new blockchain, PayPal must seek separate approval from NYDFS. As of now, NYDFS has only authorized Ethereum and Solana as platforms for issuing stablecoins under a trust-based model, with Solana added at the end of 2023.
