PayPal USD’s Expansion to Arbitrum: What it Means for the Stablecoin
Key Insights:
- PayPal USD to roll out on Arbitrum network and what it means for growth.
- PYUSD dominance recap after expanding to multiple networks in 2025.
- PYUSD stablecoin market cap retreats as attention shifts to altcoins.
PayPal USD (PYUSD), the stablecoin launched by PayPal, has been one of the relatively newer stablecoins making waves in the market over the last few months. It sparked renewed interest earlier this year courtesy of expanded network support.
PayPal USD was initially limited to the Ethereum and Solana networks. However, in 2025, the stablecoin expanded to Berachain, Flow, and Plumme mainnet.
The expanded network support so far this year may have aided in PYUSD’s growth and adoption. For context, its market cap briefly surged above $1 billion in June but has since retreated to about $841 at press time.
But, despite the expanding support, PayPal USD still struggled to sustain a positive growth trajectory. A clear sign that adoption was still low, but recent developments revealed another attempt at going mainstream.
PayPal to deploy PYUSD onto Arbitrum
Recent reports revealed that PayPal USD was headed for the Ethereum’s top Layer 2 network, Arbitrum. The move, which was aimed at boosting cross-chain utility also highlighted efforts towards pushing PYUSD deeper into the crypto mainstream.
The stablecoin was previously deployed on the Stellar network with the goal of expanding accessibility to businesses. However, this latest expansion underscored an effort to push deeper into traditional finance.
The launch came barely 2 weeks after Arbitrum confirmed its integration with the Robinhood trading app. These developments could indicate that PayPal USD was looking to take advantage of growth opportunities linking DeFi liquidity with Robinhood.
The potential upside was that Arbitrum could offer an avenue for PayPal to push into mainstream use or adoption. In other words, the stablecoin has a chance to play a critical role in bridging the gap between WEB3 and traditional finance.
While the latest developments could potentially push PayPal USD towards more mainstream adoption, recent performance underscores weak uptake.
PayPal USD dominance and volumes reveal the state of demand
Dominance data revealed that the highest share of PYUSD tokens was on the Ethereum network. The latter controlled over 65% of the PayPal USD stablecoin circulation, making it the dominant network.
Solana which had previously overthrown Ethereum in terms of Dominance in August 2024, was down to 24.6%. Solana’s initial surge in dominance was largely driven by high yields on the stablecoin.
The yields which were aimed at boosting adoption have since declined. As a result, PayPal USD volumes have declined considerably, revealing that it was yet to attain critical organic mass.
According to DeFiLlama, the stablecoin’s volumes on Ethereum network were down by 16% in the last 4 weeks and 3.20% on the Solana network. Berachain had the highest dip at over 24%. However, volumes on Flow network were up by 10.5%.
The retreating volumes may explain why PYUSD’s marketcap has been struggling to stay above $1 billion. Another potential reason could be the heavy outflows as liquidity flowed into Bitcoin and altcoins.
However, some of the top stablecoins such as USDT and USDC still maintained healthy marketcap growth during the same period. This meant the stablecoin’s declining marketcap was likely not due to the recent rally but rather linked to limited adoption.
The expansion into Arbitrum raised question as to whether Arbitrum may offer a Hail Mary for the PayPal USD stablecoin. On-chain data recently revealed that the Ethereum layer 2 had the highest net bridge flows.
It was thus a no-brainer that Arbitrum was the next best destination in PayPal USD’s expansion journey.
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