Payments giant PayPal is looking to scale the use of its flagship stablecoin, PayPal USD (PYUSD), across its platform throughout 2025, according to a recent report from Bloomberg. The move aims to create a unified ecosystem, fulfilling all merchant needs within a single, comprehensive platform.

PayPal wants to be a leader in innovative and efficient payment solutions for businesses of all sizes.

Michelle Gill, Executive Vice President and General Manager of PayPal’s Small Business and Financial Services Group, revealed that PayPal will launch a new bill-pay feature that allows its over 20 million small-to-medium sized merchants to pay their vendors using PYUSD by the end of this year.

Gill expects the initiative to encourage vendors to join the PayPal network, simplifying transactions and reducing processing times for both parties.

The Stablecoin Boom

PayPal’s U.S. dollar-pegged stablecoin is expected to be a key focus in facilitating cross-border payments, as many US merchants pay suppliers abroad.

PayPal aims to leverage PYUSD to streamline cross-border payments for US merchants, reducing transaction friction and speeding up payment times, effectively creating a more efficient and cost-effective payment process for international business.

PYUSD will also be integrated into Hyperwallet, PayPal’s mass payment platform. PayPal aims to enable businesses to send payments to contractors, freelancers, and sellers globally with increased efficiency.

The company plans to allow merchants to settle PayPal checkout transactions using cryptocurrencies by the end of 2025, and PYUSD will be an integral piece of this strategy.

For the payments giant, practical use is the only thing that matters; the real worth of blockchain comes from its ability to solve actual problems and improve real-life situations.

PayPal’s initiatives, such as integrating PYUSD into its payment systems, are a way to put blockchain technology into practice, according to Alex Chriss, CEO of PayPal.

PYUSD’s Market Capitalization Declines Amid Market-Wide Pullback

PayPal launched PYUSD on the Ethereum blockchain in August 2023, and later announced the expansion of the stablecoin on Solana last May. This expansion targets Solana’s high transaction speed and efficiency for payments-focused applications.

PYUSD has gained traction since its launch. According to CoinGecko data, the stablecoin reached a market capitalization of over $1 billion by December 2024.

The adoption has been driven by several factors, including its accessibility to over 100 million users in the U.S. through PayPal and Venmo. Plus, PYUSD can be used for fee-free cross-border payments via Xoom, reducing transaction costs.

Launching on Solana has more than doubled PYUSD’s circulation, with over 60% now on Solana.

However, while PYUSD benefits from PayPal’s vast user base, it may need to enhance its features or partnerships to remain competitive in the cross-border payment space.

The stablecoin still needs to expand its reach and utility to compete effectively with dominant stablecoins like USDT and USDC.

Tether currently takes the largest share of the stablecoin market, with a market cap of $142 billion, followed by USDC with around $56 billion.

PYUSD’s market cap, currently around $703 million, places it tenth among stablecoins. The stablecoin recently saw its market capitalization fall from $772 million as a result of a widespread market correction, which saw a staggering $300 billion wiped from the overall cryptocurrency market since Monday.

The arrival of new stablecoins that focus on cross-border settlements like RLUS, Ripple’s stablecoin, may also pose challenges for PYUSD.

However, PayPal’s stablecoin still benefits from being fully backed by U.S. dollar deposits and short-term U.S. Treasuries, offering a high level of regulatory compliance and stability.

In November, PYUSD was integrated into LayerZero, a cross-blockchain bridging protocol, to facilitate transfers between the Ethereum and Solana blockchains using the Omnichain Fungible Token Standard.

The integration aims to enable seamless crypto transfers without relying on centralized platforms.