Today PayPal announced plans to launch its PYUSD stablecoin on the Stellar blockchain, a network specifically designed for payments, especially cross border. However, this is subject to receiving regulatory approval from the New York Department of Financial Services (NYDFS).
The stablecoin is already available on the Ethereum and Solana blockchains and its market capitalization is just shy of a billion dollars. One of the wallets has a balance of more than $300 million, which could either represent assets owned by PayPal or Paxos, or more likely the cumulative PYUSD tokens held within PayPal wallets. The stablecoin can also be used outside the PayPal wallet for DeFi and other use cases.
This expansion to Stellar makes strategic sense given the network’s existing infrastructure. For cross border payments Stellar already has a strong network for on and off-ramps. Plus, PayPal highlighted that Stellar supports certain financing and business loan applications which could benefit users.
“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, CEO of Stellar Development Foundation. “Together, we are bringing stable digital currency to small businesses and individuals in emerging markets all over the globe.”
This NYDFS approval requirement stems from PayPal’s regulatory approach. By opting to partner with Paxos, a New York regulated trust company, it is more tightly regulated compared to stablecoin issuers such as Circle that have a virtual currency and money transmitter license. Hence, it needs to get approval for each new blockchain. To our knowledge, NYDFS has only approved Ethereum and Solana to date for trust-based stablecoins. It added Solana at the end of 2023.
