PayPal’s US Dollar Stablecoin Debuts on Stellar
PayPal’s US dollar stablecoin (PYUSD) has officially launched on the Stellar blockchain, providing users with quicker and more affordable payment options.
With integrations across PayPal, Venmo, and the Stellar ecosystem, this development raises questions regarding the implications for Stellar’s native token, XLM.
PYUSD went live on Stellar on Thursday, promoting low-fee transfers, approximately five seconds finality, and anchoring for fiat ramps.
The announcement also unveiled Stellar Asset Contract-compatible contracts for payments.
The Stellar Development Foundation expressed similar sentiments, praising this initiative as a way to revolutionize everyday payments. Community feedback has also been quite positive.
- “Stellar is fast, cheap, and secure. This is one of the biggest partnerships we’ve been waiting for. Super, super exciting!” a user stated.
Moreover, the integration might represent more than just a headline for the Stellar network. It reinforces its ongoing goal to establish itself as a payments-centric blockchain.
This timing coincides with the rollout of Stellar’s Protocol 23 upgrade, “Whisk,” which became active earlier this month.
Whisk has introduced parallel smart contract execution and transaction throughput optimized for 5,000 TPS, marking one of the most notable technical advancements in Stellar’s history.
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By minimizing latency and costs while enhancing capacity, Whisk lays the groundwork for PYUSD to scale effectively across Stellar’s network of wallets, anchors, and payment partners.
Developers will also gain from a unified event formatting, making it more straightforward to create applications that merge traditional Stellar operations with smart contracts.
Additional Developments in Stablecoins
However, September’s developments regarding stablecoins on Stellar extend beyond the launch of PYUSD. Ondo Finance has recently rolled out USDY, a yield-bearing stablecoin that is backed by US Treasuries and bank deposits.
“Stablecoins unlocked global access to the US dollar. With USDY, we’re taking the next step by bringing US Treasuries on-chain in a form that combines stability, liquidity, and yield,” stated Ian De Bode, Chief Strategy Officer at Ondo Finance.
As per Denelle Dixon, CEO of the Stellar Development Foundation, the pairing of Stellar’s reach with yield-bearing assets showcases the possibilities available on-chain.
USDY is already integrated into Stellar-based applications like LOBSTR, Aquarius, Meru, Soroswap, and Decaf Wallet.
Despite the excitement, XLM experienced a nearly 1.3% decline on launch day and has dropped almost 2% in the last 24 hours. At the time of this writing, the token is trading at $0.39.
This indicates a sense of caution among investors, as short-term price variations often relate to liquidity and overall market sentiment.
Nevertheless, Stellar now features a stablecoin from a US fintech giant and the first yield-bearing stablecoin backed by Treasuries. Paired with its Whisk upgrade, the ecosystem has rarely appeared stronger.
