PayPal's Stablecoin Approaches $1 Billion in Capital, Awaiting NYDFS Approval to Expand Cross-Border Payment Network.
PayPal today announced plans to expand the deployment of stablecoin PYUSD on the Stellar network – a blockchain specifically designed for payments, especially cross-border payments. However, this plan depends on being licensed by the New York State Department of Financial Services (NYDFS), demonstrating PayPal's strict legal compliance approach.
Currently, PYUSD stablecoin is available on Ethereum and Solana blockchains with a total market capital nearly reaching $1 billion. One of the wallets containing PYUSD has a balance over 300 million USD, which may reflect assets held by PayPal or Paxos, or more likely the total PYUSD tokens stored in PayPal's internal wallets.
PYUSD is not only used within the PayPal ecosystem but can also be traded on DeFi platforms and external applications. Expanding to Stellar is seen as a strategic move, as this network already has strong infrastructure supporting cross-border payments, including global on-ramp and off-ramp.
Global Expansion Potential
PayPal emphasizes that Stellar supports financial applications such as business financing and business loans, which can provide practical value for users. Denelle Dixon, CEO of Stellar Development Foundation, shared: "By bringing PYUSD to over 170 countries, we are transforming stablecoin into a practical financial tool that millions of users and merchants can use daily."
Ms. Dixon also emphasized: "Together, we are bringing stable digital money to small businesses and individuals in emerging markets globally." This shows a vision of expanding to developing markets where efficient cross-border payments are in high demand.
The approval requirement from NYDFS stems from PayPal's strict legal compliance approach. Collaborating with Paxos – a licensed trust company in New York – means PYUSD is subject to more rigorous oversight compared to stablecoin issuers like Circle, which only have virtual currency and money transfer licenses.
Therefore, each time PYUSD expands to a new blockchain, PayPal must obtain separate approval from NYDFS. According to current information, NYDFS has only granted licenses for Ethereum and Solana as stablecoin issuance platforms under the trust-based model, with Solana added at the end of 2023.
