Ethereum News Today: PayPal USD Stablecoin Expands to Arbitrum for Mainstream Adoption

PayPal USD (PYUSD), a stablecoin launched by PayPal, has been gaining traction in the market over the past few months, particularly due to its expanded network support. Initially limited to the Ethereum and Solana networks, PYUSD extended its reach to Berachain, Flow, and Plumme mainnet in 2025. This expansion has contributed to its growth and adoption, with its market cap briefly surpassing $1 billion in June before retreating to approximately $841 million at the time of reporting.

Despite the expanded network support, PYUSD has struggled to maintain a positive growth trajectory, indicating that adoption remains low. However, recent developments suggest another push towards mainstream adoption. PayPal has announced plans to deploy PYUSD onto Arbitrum, Ethereum’s top Layer 2 network. This move aims to enhance cross-chain utility and further integrate PYUSD into traditional finance. The launch comes just two weeks after Arbitrum confirmed its integration with the Robinhood trading app, suggesting that PayPal USD is leveraging growth opportunities by linking DeFi liquidity with Robinhood.

The potential upside of this expansion is significant. Arbitrum could provide an avenue for PayPal to achieve mainstream use or adoption, bridging the gap between WEB3 and traditional finance. However, recent performance data reveals weak uptake. Dominance data shows that the highest share of PYUSD tokens is on the Ethereum network, controlling over 65% of the stablecoin’s circulation. Solana, which previously overtook Ethereum in terms of dominance in August 2024, has seen its share drop to 24.6%. This decline is attributed to reduced yields aimed at boosting adoption, which have since decreased, leading to a considerable decline in PYUSD volumes.

According to DeFiLlama, PYUSD’s volumes on the Ethereum network have decreased by 16% in the last four weeks, and by 3.20% on the Solana network. Berachain experienced the highest dip at over 24%, while volumes on the Flow network increased by 10.5%. The retreating volumes may explain why PYUSD’s market cap has struggled to stay above $1 billion. Another potential reason could be the heavy outflows as liquidity shifted into Bitcoin and altcoins. In contrast, top stablecoins like USDT and USDC maintained healthy market cap growth during the same period, indicating that PYUSD’s declining market cap is likely due to limited adoption rather than the recent rally.

The expansion into Arbitrum raises the question of whether it could offer a turning point for the PayPal USD stablecoin. On-chain data reveals that Arbitrum has the highest net bridge flows, making it a strategic destination for PYUSD’s expansion. This move could potentially boost PYUSD’s adoption and integration into traditional finance, addressing the current challenges of limited uptake and declining volumes.