PayPal's PYUSD stablecoin has surged from a market cap of as low as $1.2 billion in September to approximately $3.8 billion, according to on-chain data. This growth marks one of the fastest increases following a significant expansion in its supply during the third quarter.
The supply of PYUSD increased by roughly 113% in November, coinciding with a 150% rise in transactions to 1.8 million. Despite being relatively new compared to established stablecoins like Tether's USDT and Circle's USDC, PYUSD emerged as the second fastest-growing stablecoin in Q3 2025, trailing only Ethena's USDe, which recorded 173% growth during the same period. This notable increase is primarily attributed to PayPal's extensive existing user network.
LayerZero Integration Fuels PYUSD Supply Growth
PayPal's integration with LayerZero in September significantly contributed to PYUSD's expansion. This integration enabled PYUSD to become available on nine additional blockchains, including Abstract, Aptos, Avalanche, Ink, Sei, Stable, and Tron, along with upgraded versions on Berachain and Flow. This expansion provided direct access to PYUSD for over 400 million active users across PayPal and Venmo. Consequently, PYUSD's supply grew from approximately $1.2 billion to about $3.8 billion in the fourth quarter, as reported by DeFiLlama on-chain data.
The LayerZero integration in September offered PYUSD a strategic advantage, facilitating rapid expansion across multiple blockchain networks. This multichain strategy also positioned PYUSD to act as a bridge between traditional finance and decentralized finance applications.
PayPal's robust distribution network has been instrumental in achieving PYUSD's current level of adoption. The observed growth in volume and token supply highlights PayPal's competitive edge in onboarding users who already trust the platform for their payment and digital finance needs.
The overall stablecoin market cap has remained at $307.2 billion, with an average weekly growth of 0.8% based on on-chain data. Tether (USDT) continues to dominate the stablecoin market, boasting a market cap of $184.6 billion, which accounts for more than half of the total stablecoin supply. Circle's USDC follows as the second-largest stablecoin issuer, with a market cap of approximately $77.3 billion. Together, these two stablecoins control over 85% of the stablecoin market share, with the majority of their supply concentrated on the Ethereum chain.
PYUSD's 3.7% Yield Raises Concerns Regarding the GENIUS Act
The 3.7% annual yield offered on PYUSD balances has drawn attention due to its potential conflict with the GENIUS Act, which prohibits yield-bearing stablecoins for compliance reasons. PayPal has not yet provided clarification on how it plans to address this concern with federal regulations, leaving questions about the stablecoin's legality and future. Currently, PayPal operates under the regulatory framework of the New York Department of Financial Services (DFS).
The GENIUS Act, signed into law in July, has played a role in shaping the stablecoin market this year. The Act stipulates that stablecoin issuers must be insured depository institutions, bank subsidiaries, or approved non-bank financial institutions. It also mandates a 1:1 reserve for all stablecoins and restricts any form of yield or interest payments to holders.
PayPal is a preferred payment option for many online consumers, and the PYUSD stablecoin is currently contributing to the firm's efforts to maintain its market leadership and enhance customer engagement.
PayPal's stock has experienced a negative year-to-date performance, reflecting a challenging market environment for the payment service provider. At the time of publication, the Year-to-Date (YTD) performance stood at -26.30%, with the stock trading at $62.90 on the Nasdaq.
In the broader cryptocurrency market, Bitcoin and Ethereum tokens have shown resilience, rebounding from recent lower lows. Both cryptocurrencies posted approximately a 7% increase over the past 24 hours. At the time of publication, BTC was trading at $92,878, while ETH was trading at $3,052.