On September 25, 2025, PayPal announced a strategic partnership with decentralized finance platform Spark to dramatically increase on-chain liquidity for its stablecoin, PayPal USD (PYUSD). The initiative aims to scale deposits from $100 million to $1 billion in the coming weeks, leveraging Spark's lending marketplace, SparkLend.
PYUSD, which is issued by Paxos and pegged to the U.S. dollar, was recently integrated into SparkLend, enabling users to supply and borrow the stablecoin. This integration is supported by Spark's $8 billion stablecoin reserve pool, providing predictable depth at set borrowing costs, a contrast to traditional liquidity programs that rely on market-maker incentives. Sam MacPherson, CEO of Phoenix Labs (a Spark contributor), emphasized that "predictable access to deep liquidity is what allows stablecoins like PYUSD to scale quickly," framing this as a blueprint for fintech firms using DeFi to bootstrap adoption.
The partnership comes amid a surge in stablecoin momentum, with global supply rising by nearly $30 billion over three months to an all-time high of $295 billion and daily transaction volumes exceeding $100 billion. David Weber, Head of PYUSD Ecosystem at PayPal, noted that with total DeFi value approaching $150 billion, platforms like Spark are crucial for advancing PYUSD as a cornerstone of DeFi. Historically, Spark deployed $630 million in Bitcoin-backed loans to Coinbase, underscoring its experience in large-scale liquidity deployments.