TLDR
- PayPal’s PYUSD stablecoin surpassed $1 billion in market cap after partnering with Spark on September 25, 2025
- The partnership aims to expand PYUSD deposits from $100 million to $1 billion through SparkLend integration
- PYUSD is now the ninth largest stablecoin by market cap with over 100% growth in the past year
- Spark provides stablecoin infrastructure backed by an $8 billion reserve, enabling users to supply and borrow PYUSD
- PayPal earns revenue by backing PYUSD with dollars invested in short-term U.S. Treasuries
PayPal has crossed a major milestone with its PYUSD stablecoin reaching over $1 billion in market cap. The achievement comes after the company announced a partnership with Spark, a decentralized finance platform, on September 25, 2025.
Spark joins forces with @PayPal to grow PYUSD supply by $1 billion within the coming weeks.
Having already reached 200m deposits, this milestone reflects both the demand for PYUSD and the effectiveness of Spark’s stablecoin bootstrapping framework. pic.twitter.com/kNri70hRGv
— Spark (@sparkdotfi) September 25, 2025
PYUSD is a dollar-pegged stablecoin issued by Paxos through PayPal. The partnership with Spark aims to grow PYUSD deposits from $100 million to $1 billion through expanded on-chain liquidity.
The stablecoin has grown by more than 100% over the past year. This growth reflects increasing demand for stablecoins rather than price appreciation, since PYUSD maintains a 1-to-1 peg with the U.S. dollar.
PYUSD now ranks as the ninth largest stablecoin by market cap. The digital asset operates on PayPal’s payment platform alongside the company’s other crypto services.
Spark announced the partnership on social media platform X. The decentralized finance platform specializes in stablecoin infrastructure and liquidity for issuers.
Through the collaboration, PYUSD is now integrated into SparkLend. This integration allows users to supply and borrow the stablecoin with support from Spark’s $8 billion reserve.
Stablecoin Infrastructure and Growth
The partnership uses a model that provides predictable liquidity without relying on market-maker incentives. This approach helps position PYUSD for faster scaling compared to traditional methods.
Spark previously deployed $630 million in Bitcoin-backed loans to Coinbase. The firm’s experience in crypto lending supports PYUSD’s expansion into decentralized finance markets.
Global stablecoin supply has increased by $30 billion to reach $263 billion. Daily trading volumes for stablecoins now exceed $100 billion across all platforms.
PayPal earns revenue from PYUSD through multiple channels. The company backs each PYUSD token with one dollar held in reserve.
Revenue Model and Treasury Benefits
These reserve dollars are invested in short-term U.S. Treasuries. This creates an arbitrage opportunity for PayPal as the stablecoin demand increases.
The treasury investment strategy becomes more profitable when interest rates rise. PayPal generates income from the yield on these government securities while maintaining the dollar peg.
Stablecoins offer lower transaction costs compared to traditional payment methods. Merchants can accept PYUSD payments without paying typical credit and debit card processing fees.
PayPal competes with other payment processors entering the crypto space. Companies like Visa and Mastercard have also formed partnerships with crypto firms.
The stablecoin business model benefits the federal government according to the American Bankers Association Bank Journal. Stablecoin issuers purchasing U.S. Treasuries helps lower T-bill interest rates, which can reduce federal debt costs.
