PayPal Expands PYUSD Integration to Compete with USDT and USDC in 2025

Amidst ongoing market volatility, PayPal Holdings is intensifying its efforts in the stablecoin space by planning to expand the integration of PYUSD across more products in 2025.

This strategic move positions PayPal as a contender against leading stablecoins like Tether (USDT) and Circle (USDC).

PayPal’s Executive Insights

In a Bloomberg interview, Michelle Gill, General Manager of PayPal’s small business and financial services division, stated:

> “A lot of the payments we’re expecting are going to be cross-border because merchants in the US are seeking to pay vendors and suppliers abroad. The thesis was: Can we facilitate that on PYUSD rails so as not to have the currency conversion, the friction, as well as time?”

In a key step toward broader stablecoin adoption, PayPal plans to integrate PYUSD into its Hyperwallet platform, facilitating seamless global payments for freelancers and contractors. This follows the company’s first successful business transaction using PYUSD in 2024, reaffirming its commitment to enhancing digital asset usability.

Acquired for $400 million in 2018, Hyperwallet will enable PYUSD payouts as early as the first half of this year.

Future Enhancements

PayPal is also looking to improve its crypto integration further by allowing merchants to settle PayPal checkout transactions with digital assets by the end of 2025. PayPal CEO Alex Chriss remarked:

> “We’ve been talking about blockchains for like a decade now — the concept of these things never becomes real until you actually can start to spend it. And I think that’s what we’re enabling.”

However, the stablecoin market faces intensified competition as key players aggressively expand their reach amid evolving regulations. Tether (USDT), for instance, is focusing on crypto-friendly regions like El Salvador despite compliance challenges under Europe’s MiCA regulations. Circle’s USDC has benefited from the Solana memecoin surge, increasing its market share significantly while securing essential regulatory approvals.

Additionally, XRP has introduced RLUSD, a new stablecoin available on Ethereum and XRPL, with an initial supply of 120 million.

Challenges Ahead

Despite PayPal’s push for PYUSD adoption, it faces fierce competition from dominant players like USDT and USDC. According to VisaOnChainAnalytics, stablecoin transaction volumes in February 2025 totaled $615 billion, with USDT at $415.61 billion and USDC at $197.37 billion. In comparison, PYUSD only recorded $1.24 billion, reflecting significant challenges in competing with market leaders.

Moreover, PYUSD’s market cap peaked at $1.01 billion in August, but has since fallen below $500 million by December, underscoring the difficulties ahead for PayPal’s stablecoin ambitions.