KEY FACTS: PayPal has expanded its dollar-pegged stablecoin, PayPal USD (PYUSD), to eight additional blockchains, including Tron, Avalanche, Aptos, and Stellar, leveraging LayerZero's Stargate Hydra bridge to enable seamless cross-chain transfers of a new permissionless variant, PYUSD0. This move aims to enhance interoperability and accessibility, positioning PYUSD, currently valued at $1.3 billion and ranked 11th among stablecoins, as a competitor in a market projected to reach $2 trillion by 2028. With support now on major networks like Ethereum and Solana, and Stellar's low-fee, fast-finality chain catering to developing economies, PayPal seeks to empower users with flexible, borderless financial solutions while navigating a competitive landscape dominated by Tether and USDC.

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Source:PayPal

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PayPal Expands PYUSD Stablecoin to Eight New Blockchains

PayPal has announced the integration of its PayPal USD (PYUSD) across eight additional blockchain networks. This move, facilitated primarily through LayerZero's innovative Stargate Hydra bridge, aims to enhance cross-chain functionality and position PYUSD as a more versatile tool in the rapidly evolving digital asset landscape. The expansion comes at a time when stablecoins are gaining traction as a cornerstone of global finance, potentially reshaping how individuals and businesses handle cross-border transactions.

The announcement, detailed in a statement from LayerZero on Thursday, introduces a new permissionless variant of the stablecoin known as PYUSD0. This version is designed to be "fully fungible" with the original PYUSD, allowing seamless interoperability across multiple blockchains without the constraints of traditional centralized systems. For PayPal users and crypto enthusiasts alike, this development promises greater flexibility in moving funds between ecosystems, reducing friction in an industry often criticized for its siloed networks.

At the heart of the expansion is LayerZero's Stargate Hydra, a sophisticated bridge that enables transfers of PYUSD0 across seven newly supported chains: Tron, Avalanche, Aptos, Abstract, Ink, Sei, and Stable. Additionally, existing permissionless implementations on Berachain, previously known as BBYUSD, and Flow (USDF) will be upgraded to the PYUSD0 standard. This upgrade ensures uniformity and eliminates compatibility issues that could arise from fragmented versions.

LayerZero's role extends beyond mere bridging; the infrastructure firm will handle the minting, burning, and deployment processes for PYUSD0, ensuring that the stablecoin maintains its peg to the U.S. dollar while operating in a decentralized manner. LayerZero stated in its official release:

"The integration will create a permissionless version of PayPal USD (PYUSD) — PYUSD0 — which will be ‘fully fungible’ with the PYUSD and interoperable across blockchains,"

Complementing this LayerZero-powered rollout, PayPal separately revealed the addition of PYUSD to the Stellar network on the same day. Stellar, renowned for its low transaction fees and rapid five-second finality, has long been a favorite among users in developing economies seeking a reliable way to hold U.S. dollar equivalents. This integration could further democratize access to stable value storage, particularly in regions where traditional banking infrastructure remains underdeveloped.

With these additions, PYUSD now boasts support on an impressive lineup of blockchains, including Ethereum, Solana, Arbitrum, and Stellar, alongside the LayerZero-enabled networks. This makes PYUSD one of the most widely accessible stablecoins in the market, rivaling the multi-chain presence of industry leaders.

PayPal's strategic expansion arrives amid explosive growth in the stablecoin sector, which the U.S. Treasury estimated in April could swell from its current $295 billion valuation to a staggering $2 trillion by 2028. This projected surge is fueled by increasing regulatory clarity and institutional adoption, with a notable catalyst being the GENIUS Act, signed into law by U.S. President Donald Trump in July. Described as "one of the most comprehensive stablecoin laws to date," the legislation provides a framework for stablecoin issuers to operate with greater certainty, potentially accelerating innovation while mitigating risks like those seen in past crypto debacles.

Stablecoins, often hailed as the "killer app" of cryptocurrency, bridge the gap between fiat currencies and decentralized finance (DeFi). They offer stability in volatile markets, enabling everything from everyday remittances to complex yield farming strategies.

Pellegrino's optimism reflects a broader industry sentiment: as blockchain interoperability improves, stablecoins could erode the dominance of legacy financial rails, empowering users with faster, cheaper, and more inclusive alternatives.

Despite the fanfare, PayPal enters a fiercely competitive arena dominated by behemoths. According to data from CoinGecko, Tether (USDT) commands a market capitalization of $171.2 billion and operates on 12 blockchains, while Circle's USDC follows closely with $74.3 billion across 25 networks. Trailing further are contenders like Ethena's USDe (USDE), Sky's USDS (formerly TrueUSD), and MakerDAO's Dai (DAI), with valuations ranging from $13.9 billion to $4.5 billion.

PYUSD, currently ranked 11th with a modest $1.3 billion market cap, launched in August 2023 under the issuance of Paxos Trust Company, PayPal's regulated partner. It marked the e-commerce giant's bold foray into crypto, allowing users to buy, sell, and hold digital assets directly within the PayPal app. Yet, PYUSD has struggled to capture significant market share, partly due to its initial limited chain support and the entrenched loyalty to USDT and USDC in trading pairs and DeFi protocols.

This latest multi-chain push could change that narrative. PayPal is leveraging LayerZero's cross-chain messaging protocol, which not only expands PYUSD's footprint but also taps into LayerZero's ecosystem of over 70 supported chains. Early adopters on networks like Avalanche and Tron, known for high throughput and low costs, may find PYUSD more appealing for real-world applications, such as micropayments or NFT marketplaces.

The Stellar integration, in particular, highlights PayPal's focus on underserved populations. Stellar's network has attracted a notable user base from developing countries, where hyperinflation and currency devaluation make dollar-denominated savings a lifeline. With PYUSD now available on this chain, individuals can more easily convert local currencies into a stable asset, shielding their wealth from economic turbulence.

For developers and DeFi builders, the LayerZero bridge opens new avenues for innovation. Smart contracts can now reference PYUSD0 across chains, enabling hybrid applications that combine the strengths of Ethereum's security with Solana's speed or Tron's scalability. This could spur a wave of dApps tailored to PayPal's 400 million-plus user base, many of whom are newcomers to crypto.

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Information Sources:

• Layerzero Blog
• Layerzero/ X
• Paypal Developer/ X
• Cointelegraph

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