PayPal and Stellar Collaborate to Power Instant, Low-Cost Global Payments for SMEs

PayPal’s dollar-pegged stablecoin, PayPal USD (PYUSD), has expanded to the Stellar blockchain network, marking a significant step in enhancing cross-border payments and financial inclusion. The integration, announced at the Stellar Meridian 2025 conference, enables PYUSD to leverage Stellar’s low-cost, high-speed infrastructure for real-time settlements and broader adoption. This move positions PYUSD to compete with Ethereum- and Solana-based stablecoins while targeting emerging markets where affordable, fast transactions are critical PayPal USD Goes Live on Stellar Expanding Access - Crypto News^[2].

The Stellar network, known for its 5-second transaction finality and minimal fees, offers a scalable solution for PYUSD’s use cases, including cross-border remittances, small business financing, and merchant services. By deploying on Stellar, PayPal aims to provide users with instant access to liquidity and working capital through Payment Financing (PayFi), a feature allowing SMEs to secure real-time funding for operational needs PayPal USD (PYUSD) Plans to Use Stellar for New Use Cases^[1]. Stellar’s ecosystem of 170+ countries and partnerships with platforms like Bitcoin.com and Chipper Cash further amplify PYUSD’s accessibility, enabling millions to transact with a stablecoin backed by U.S. Treasuries and dollar deposits PayPal’s PYUSD Now Live on Stellar: Announcement by PayPal …^[3].

PayPal’s vice president of crypto, May Zabaneh, emphasized the collaboration’s potential to bridge traditional finance with blockchain technology. “Stablecoins have long been seen as crypto’s ‘killer app,’ and Stellar’s infrastructure allows us to deliver trusted digital dollars to everyday users and merchants,” she stated. Stellar CEO Denelle Dixon added that the integration would empower small businesses and individuals in emerging markets, where delayed settlements and high fees often hinder financial activity PayPal USD (PYUSD) Plans to Use Stellar for New Use Cases^[1].

The expansion aligns with PayPal’s broader strategy to diversify PYUSD’s blockchain footprint. While the stablecoin initially operated on Ethereum and Solana, its Stellar deployment reflects a focus on scalability and cost efficiency. According to the U.S. Treasury, the stablecoin market is projected to grow from $295 billion to $2 trillion by 2028, underscoring the urgency for platforms to optimize transaction speeds and reduce costs .

Regulatory considerations remain a key factor. The New York State Department of Financial Services (NYDFS) has yet to finalize approval for the integration, as noted in earlier disclosures PayPal USD (PYUSD) Plans to Use Stellar for New Use Cases^[1]. However, the live launch of PYUSD on Stellar, confirmed in September 2025, indicates progress toward compliance. PayPal and Stellar must navigate evolving global regulations to ensure the stablecoin’s legality across jurisdictions.

Market analysts highlight the strategic value of Stellar’s 20 billion+ transactions processed since its launch, providing a proven infrastructure for PYUSD’s growth. The partnership could drive increased liquidity and transaction volumes on Stellar, particularly as PYUSD integrates with wallets and platforms supporting 5-second settlements. For now, the move cements PayPal’s role in the stablecoin ecosystem while challenging industry leaders like Tether and Circle to innovate in cross-border payment solutions .