PayPal is taking another step to move its stablecoin from a crypto product into payments infrastructure.
PayPal USD, or PYUSD, is now being issued natively on Polygon through Paxos and made available through Polygon’s Open Money Stack, according to an announcement from Polygon Labs. The integration gives businesses a way to use PYUSD for payment acceptance, cross-border settlement and local currency cash-outs through one payments stack.
The move is not just about adding PYUSD to another blockchain.
It gives PYUSD a better shot at becoming part of the daily plumbing used by merchants, payroll firms, remittance apps and marketplaces. That is where stablecoins are increasingly expected to compete: not as tokens held in wallets, but as settlement assets embedded inside business payment flows.
PayPal launched PYUSD in 2023 with Paxos as issuer. The stablecoin is backed by U.S. dollar deposits, short-term U.S. Treasuries and similar cash equivalents, and can be redeemed one-for-one for dollars, according to Paxos.
PayPal has since been widening access.
In March, the company said it was making PYUSD available to users in 70 markets through PayPal accounts. PayPal also says PYUSD can be bought, transferred and converted globally, and is redeemable one-for-one for U.S. dollars.
The Polygon launch pushes that strategy further into enterprise payments.
Until now, many businesses trying to use stablecoins have had to assemble several pieces separately. They needed token access, wallets, compliance checks, fiat on- and off-ramps, liquidity routing and cash-out partners.
Polygon’s Open Money Stack is meant to collapse those functions into one integration.
Polygon describes the stack as a single API for moving funds globally with stablecoins, covering wallets, ramps and settlement. A separate Polygon post says the system connects fiat access, wallets, orchestration and onchain settlement in one vertically integrated stack.
With PYUSD native in that stack, a business could accept money from a card, bank or exchange balance, hold or move PYUSD across borders, and cash out to local currency. Polygon says regulated fiat access and compliance tooling are built into the process.
That is the core business pitch.
A payroll platform could pay contractors in multiple countries. A marketplace could settle with overseas sellers. A remittance app could use PYUSD as the dollar settlement asset while still delivering local currency to the receiver.
The benefit to PayPal is distribution.
Stablecoins become more valuable when they are used repeatedly inside payment corridors. More integrations mean more potential PYUSD circulation, more transaction activity and more reasons for payment companies to support PayPal’s dollar instead of defaulting to USDC, USDT or a new shared stablecoin.
PYUSD is no longer tiny, but it is still competing against much larger stablecoin networks.
According to CoinMarketCap, PYUSD’s market cap is $2.84 billion. This gives PayPal meaningful scale, but still leaves it far behind market leaders such as Tether’s USDT and Circle’s USDC.
That gap explains why utility matters.
If PayPal wants PYUSD to become more than a branded digital dollar, it needs places where the token is useful. Polygon’s payment stack gives it a route into business use cases where stablecoins can solve real operational problems, especially around cross-border settlement and cash management.
PayPal has already been moving in that direction.
In 2025, the company announced Pay with Crypto, a merchant product that allows businesses to accept crypto payments from global buyers and receive automatic settlement in local currency. PayPal said the product supports more than 100 cryptocurrencies and wallets including Coinbase and MetaMask, with instant conversion into stablecoin or fiat.
PYUSD on Polygon fits that broader strategy.
PayPal can now position PYUSD as a settlement asset for merchants and platforms, not only as a consumer-facing balance inside the PayPal app. That could help the company defend its payments franchise as stablecoin-native competitors try to bypass card networks, bank wires and traditional cross-border rails.
Regulation is another part of the pitch.
Paxos, the issuer of PYUSD, received OCC approval in December 2025 to convert to a national trust charter. The OCC order said the converted institution would operate as Paxos Trust Company, National Association.
That federal oversight gives PayPal and Polygon a stronger enterprise argument.
Large companies are unlikely to move payroll, remittances or marketplace settlement through a stablecoin unless they are comfortable with the issuer, the reserve model and the compliance stack. In the U.S., the GENIUS Act created a federal framework for payment stablecoins, including requirements around liquid backing assets and public reserve disclosures.
The market is moving quickly.
Stripe has rebuilt its crypto payments strategy around stablecoins. Its documentation says businesses can accept stablecoin payments from customers globally, including USDC on Ethereum, Solana, Polygon, Base and Tempo, while Stripe’s acceptance flow can settle funds in a Stripe balance in dollars.
Stripe also completed its acquisition of Bridge in February 2025.
That deal gave Stripe a stablecoin orchestration platform and signaled that major payments firms now see digital dollars as infrastructure, not simply crypto market instruments.
Coinbase is making a similar push.
The company introduced Coinbase Payments in 2025 as a stablecoin payments stack for commerce platforms, built around USDC and Base. Coinbase said Shopify was already live, giving merchants 24/7 USDC payments without requiring them to manage blockchain complexity.
Circle is also building payment infrastructure around USDC.
In April, Circle launched CPN Managed Payments, a managed settlement layer for financial institutions that removes the need for companies to manage digital asset complexity directly.
The most direct challenge to PayPal’s model may come from Open USD.
A consortium including Visa, Mastercard, Stripe, Coinbase and BlackRock announced Open USD in June. The model is built around a shared dollar stablecoin that businesses can mint and redeem for free, with reserve earnings shared among participating members after a management fee.
That creates a strategic split.
Open USD is betting that the stablecoin market wants a shared, neutral dollar backed by many distributors. PayPal is betting that a proprietary dollar can win if it is trusted, regulated and deeply integrated into payment rails.
PYUSD on Polygon is PayPal’s clearest example of that second strategy.
It lets the company extend its stablecoin beyond PayPal accounts and selected exchanges into an enterprise stack where businesses can use PYUSD without stitching together wallets, ramps and compliance systems themselves.
The upside for PayPal is clear.
If PYUSD becomes a working settlement asset, PayPal gains a stronger role in the stablecoin payment economy. It can use PYUSD to support merchant settlement, cross-border transfers, crypto checkout and potentially new financial products around programmable money.
The risk is also clear.
Stablecoin payments are becoming crowded. Stripe, Coinbase, Circle, Open USD and traditional financial companies are all trying to own parts of the same flow. PayPal’s advantage is its brand, existing merchant relationships and regulated issuer partnership. Its challenge is making PYUSD useful enough that businesses choose it over the stablecoins already dominating liquidity.
That is why the Polygon move matters.
It does not make PYUSD the default business stablecoin overnight. But it gives PayPal a more practical distribution channel at a time when stablecoin competition is shifting from token issuance to payments execution.
The next phase will be decided less by who has the best-branded digital dollar.
It will be decided by who can make that dollar move through real business workflows with the least friction.
Reporting by Rakhi Shah; Editing by Rohit Kumar
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