PayPal’s PYUSD stablecoin has surged from as low as $1.2 billion in September to roughly $3.8 billion in market cap so far based on on-chain data. The growth marks one of the fastest increases following a significant increase in its supply in Q3.
PYUSD supply increased by roughly 113% in November, alongside a 150% rise in transactions to 1.8 million. Despite PYUSD being relatively new compared to Tether’s USDT and Circle’s USDC, the stablecoin marked as the second fastest growing stablecoin in Q3 2025 behind Ethena’s USDe, which recorded 173% growth over the same period. The increase was primarily attributed to PayPal’s extensive network.
LayerZero integration pushes PYUSD supply growth
PayPal integrated with LayerZero in September, which helped expand PYUSD to nine additional blockchains, including Abstract, Aptos, Avalanche, Ink, Sei, Stable, and Tron, and upgraded versions on Berachain and Flow. The expansion enabled direct access to over 400 million active users across PayPal and Venmo for PYUSD. PYUSD supply increased from roughly $1.2 billion to approximately $3.8 billion in Q4, based on DeFiLlama on-chain data.
The LayerZero integration in September provided PYUSD with the opportunity to expand its presence across multiple chains rapidly. The multichain strategy also allowed PYUSD to operate as a bridge between traditional finance and decentralized finance applications.
PayPal’s distribution network has enabled PYUSD to achieve the current adoption. The growth in volume and token supply underscored PayPal’s competitive advantage in onboarding users who have already established trust in the platform for payments and digital finance.
So far, the stablecoin market cap has remained at $307.2 billion, with an average weekly growth of 0.8% based on on-chain data. Tether USDT remains the dominant stablecoin, with a market cap of $184.6 billion, representing more than half of the total stablecoin supply. Circle’s USDC accounts for roughly $77.3 billion, coming in as the second-largest stablecoin issuer. The two stablecoins control over 85% of the stablecoin market share, with most of the supply concentrated on the Ethereum chain.
PYUSD’s 3.7% yield raises concerns of contradiction with the GENIUS Act
PYUSD’s 3.7% annual yield on balances has, however, attracted attention following its contradiction of the GENIUS Act. The GENIUS Act prohibits yield-bearing stablecoins for compliance purposes. So far, PayPal has not clarified how it will address the current concern with federal regulations, leaving open questions about the legality and future of the stablecoin. Currently, PayPal operates under the New York DFS regulations.
The GENIUS Act was signed into law in July and has helped in shaping the stablecoin market this year. According to the Act, issuers are limited to insured depository institutions, bank subsidiaries, and approved non-bank financial institutions. The GENIUS Act requires a 1:1 reserve for all stablecoins and restricts any form of yield or interest to holders.
PayPal is one of the top payment options for online consumers who make purchases online. PYUSD stablecoin is presently helping the firm retain its lead and boost its customer engagement.
PayPal stock has recorded a negative YTD this year, reflecting a tough market for the payment service provider. The YTD stood at -26.30% at the time of publication, with the stock trading at $62.90 on Nasdaq.
Across the broader cryptocurrency market, Bitcoin and Ethereum tokens have rebounded from last week’s lower lows, posting a roughly 7% increase over the past 24 hours. BTC was trading at $92,878 at the time of publication, alongside ETH, which was trading at $3,052.
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