PayPal is upgrading its stablecoin, PYUSD, to support real-world payments, commerce, and microfinancing by integrating with the Stellar blockchain, a network known for its speed, low fees, and scalability. This marks a major evolution in PayPal’s stablecoin strategy and a step toward expanding its digital currency footprint beyond Ethereum and Solana.
The Stellar network is engineered for speed, efficiency, and cross-border usability, processing transactions in seconds with near-zero costs. Its infrastructure spans 170 countries and includes digital wallets, local fiat on/off ramps, and seamless banking integration. This positions Stellar as a natural fit for PayPal’s ambition to bring stablecoin-powered payments to the masses, especially in emerging markets where traditional banking is either expensive or inaccessible.
According to Chris, a senior figure at PayPal familiar with the initiative, the integration with Stellar adds a powerful third rail alongside Ethereum and Solana. It opens the door for developers and businesses worldwide to leverage a more inclusive financial ecosystem powered by blockchain.
One of the most disruptive aspects of this partnership is the introduction of PayFi, a payment financing model designed specifically for small and medium-sized businesses (SMBs). The solution aims to resolve delayed receivables and pre-funding issues by allowing businesses to access instant working capital loans in PYUSD, directly deposited into Stellar wallets.
— The man (@SirTrust001) June 11, 2025PayFi isn’t a trend — it’s a financial unlock.
Built on @humafinance, it brings future payments like invoices & payroll onchain, turning them into real, liquid yield.✅ Trillions in volume
✅ Risk-adjusted returns
✅ Instant liquidity for businesses pic.twitter.com/aBcopUxIEN
These funds can be used to pay suppliers, manage cash flow, and handle inventory expenses. The instant settlement and transparency of blockchain provide operational efficiency not commonly found in traditional financial channels. In addition, liquidity providers can participate in the PayFi model and earn yields from real-world economic activity rather than speculative crypto trading.
May Zabaneh, PayPal’s VP of Blockchain, Cryptocurrency, and Digital Currency, emphasized that stablecoins represent one of crypto’s “killer apps”, offering the stability of fiat with the flexibility and speed of blockchain. He believes that the Stellar collaboration will push the utility of stablecoins beyond the speculative realm into everyday usage, especially in underserved regions.
Danelle Dixon, CEO of the Stellar Development Foundation, echoed the sentiment, asserting that Stellar’s infrastructure was built to bring fast, low-cost payments at scale. With a reach of over 170 countries, this partnership could transform PYUSD into a truly global financial tool for both consumers and merchants.
To extend its reach, PayPal has already partnered with regional fintech enablers like Gebuana Lhuillier in the Philippines and Yellow Card in Africa, tapping into over 28,000 cash-in/cash-out locations. Analysts suggest this move could enable remittances at 80% lower fees than traditional players like Western Union or MoneyGram, an edge that could position PayPal as a major player in cross-border payments.
Despite its potential, PYUSD faces several hurdles. The New York Department of Financial Services (NYDFS) has yet to greenlight the expansion due to concerns over money laundering and consumer protections. Additionally, Stellar’s decentralized nature may clash with regulators’ preference for centralized control and compliance.
Market competition is also fierce. Circle’s USDC, backed by Goldman Sachs, currently holds over $50 billion in circulation and dominates stablecoin payments, while Tether’s USDT remains a global giant. PYUSD is entering a saturated market where network effects and trusted liquidity partners matter greatly.
Financial analyst Jim Cramer calls PayPal’s PYUSD push a high-risk, high-reward play. If regulators approve and SMBs adopt PayFi, shares could surge. But delays or poor adoption may turn it into a costly misfire. As PYUSD rolls out on Stellar, the crypto world watches closely.
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