PayPal's Stablecoin Leap: Building a Borderless Crypto Dollar with No Middlemen Needed

PayPal’s PayPal USD (PYUSD) stablecoin is expanding its presence across multiple blockchains through an integration with LayerZero’s Stargate Hydra bridge, broadening its accessibility to users and developers in the decentralized finance (DeFi) ecosystem. The move introduces a permissionless version of the stablecoin, termed PYUSD0, which is now available on several additional blockchains, including Tron, Avalanche, Sei, and others. This expansion is intended to facilitate greater interoperability and liquidity across networks while maintaining the stablecoin’s 1:1 peg to the U.S. dollar.

According to the latest developments, LayerZero confirmed that PYUSD0 remains fully fungible with the original PYUSD, allowing users to seamlessly transfer value between chains without encountering fragmentation or loss of value. The interoperability is enabled via LayerZero’s Omnichain Fungible Token (OFT) standard, the same technology underpinning Tether’s USDT0. The new version is now accessible on seven additional blockchains, including Abstract, Aptos, Avalanche, Ink, Sei, Stable, and Tron, with existing bridged tokens on Berachain and Flow also upgrading to the PYUSD0 standard.

The move follows PayPal’s adoption of LayerZero’s OFT standard in November 2024, which enabled cross-chain transfers between Ethereum and Solana. The latest integration eliminates the need for centralized intermediaries like Venmo or PayPal itself for cross-chain transactions, enhancing self-custody and reducing reliance on traditional financial infrastructure. This expansion is also expected to drive PYUSD’s adoption among developers, who can now integrate the stablecoin into their applications without requiring special permissions.

As of the latest data, PYUSD’s market capitalization stood at approximately $1.3 billion, according to CoinGecko, marking an all-time high for the stablecoin. Despite this, PYUSD remains significantly smaller than major stablecoins such as Tether’s USDT and Circle’s USDC, which have market capitalizations of $171 billion and $74 billion, respectively. However, PYUSD has shown strong growth in corporate adoption, with a recent survey by EY-Parthennon reporting that 36% of corporate respondents use the stablecoin for business transactions, surpassing alternatives like Ethena’s USDe and Sky Protocol’s USDS in terms of popularity.

The expansion is part of PayPal’s broader strategy to integrate digital assets into its platform. The company recently announced PayPal Links, a peer-to-peer payments feature that allows users to send and receive funds via personalized links. The feature is expected to support crypto assets, including Bitcoin, Ethereum, and PYUSD, in the near future, with a rollout planned first in the U.S. and later expanding globally.

According to analysts, the expansion of PYUSD across multiple blockchains signals PayPal’s commitment to supporting a more open and accessible financial infrastructure. As the stablecoin market continues to grow—recently surpassing $270 billion in total value—interoperability and regulatory compliance are becoming increasingly important factors for adoption.