Spark Powers PayPal’s $1B PYUSD Liquidity Surge via DeFi

PayPal has partnered with decentralized finance (DeFi) platform Spark to inject $1 billion in liquidity into its stablecoin, PYUSD, through SparkLend, Spark’s lending marketplace. The initiative aims to scale PYUSD deposits from $100 million to $1 billion within weeks by leveraging Spark’s $8 billion stablecoin reserve pool, offering a cost-effective alternative to traditional liquidity programs reliant on market-maker incentives PayPay Taps Spark to Boost PYUSD Liquidity by $1B Through DeFi Lending^[1]. PYUSD, issued by Paxos and pegged to the U.S. dollar, was recently integrated into SparkLend, enabling users to supply and borrow the stablecoin while benefiting from predictable borrowing costs. This approach contrasts with conventional methods, which often incur “low double-digit” expenses due to third-party market makers, according to Sam MacPherson, CEO of Phoenix Labs, a Spark contributor PayPal Taps DeFi’s Spark to Inject $1B into PYUSD Stablecoin^[2].

The partnership underscores PayPal’s strategy to position PYUSD as a cornerstone of DeFi, capitalizing on the sector’s growth. Total DeFi value has approached $150 billion, and stablecoin supply has surged to $263 billion in three months, with daily transaction volumes exceeding $100 billion PayPal Taps DeFi’s Spark to Inject $1B into PYUSD Stablecoin^[2]. Spark’s model provides “cheap capital” at rates 7-8% lower than market makers, MacPherson noted, emphasizing its scalability and efficiency. The collaboration has already driven PYUSD deposits to $200 million, with Spark swapping “tens of millions of USDC for PYUSD daily” to build liquidity depth PayPal Taps DeFi’s Spark to Inject $1B into PYUSD Stablecoin^[2].

David Weber, Head of PYUSD Ecosystem at PayPal, highlighted the initiative’s role in advancing PYUSD’s adoption while maintaining regulatory compliance and composability. “Platforms like Spark are crucial to advancing PYUSD as a cornerstone for DeFi,” Weber stated, adding that the partnership enables faster market expansion for the stablecoin PayPay Taps Spark to Boost PYUSD Liquidity by $1B Through DeFi Lending^[1]. Spark’s integration of PYUSD follows its prior deployment of $630 million in on-chain Bitcoin-backed loans to Coinbase, demonstrating its capacity to handle large-scale fintech demands PayPal Taps DeFi’s Spark to Inject $1B into PYUSD Stablecoin^[2].

The move aligns with broader trends in stablecoin adoption, which have seen global supply grow by nearly $30 billion in three months. Clearer regulatory frameworks are also fostering traditional fintech involvement, MacPherson noted, as stablecoins increasingly underpin onchain finance. The partnership’s success could serve as a blueprint for other fintech firms seeking to leverage DeFi for stablecoin scalability, particularly in markets where transaction efficiency and cost predictability are critical PayPal Taps DeFi’s Spark to Inject $1B into PYUSD Stablecoin^[2].

Critically, the initiative addresses liquidity challenges that have historically constrained stablecoin growth. By bypassing expensive intermediaries, Spark’s model offers a sustainable path for PYUSD to achieve deep, accessible liquidity. This strategy is particularly significant as stablecoins face scrutiny over systemic risks, with regulators and market participants seeking solutions that balance innovation with stability PayPay Taps Spark to Boost PYUSD Liquidity by $1B Through DeFi Lending^[1].