PayPal Partners With Spark to Boost PYUSD Stablecoin Liquidity to $1 Billion

PayPal announced a new partnership with DeFi platform Spark to increase the liquidity of its stablecoin, PYUSD, to $1 billion in just weeks. According to Spark co-founder Sam MacPherson, deposits have already surged to nearly $200 million, showing how this collaboration can create a new model for digital asset growth.

Liquidity at Lower Costs

MacPherson explained that stablecoins scale when they have predictable access to deep liquidity. Traditionally, this required expensive third-party market makers, with costs in the low double digits. Spark’s model offers a more efficient solution, providing capital at significantly lower rates—around 7% to 8%.

“This cost efficiency is why this program is a strong fit for PayPal,” MacPherson told Investing.com.

PayPal’s DeFi Strategy

For PayPal, liquidity is central to its DeFi ambitions. David Weber, Head of the PYUSD Ecosystem at PayPal, said the collaboration helps PYUSD expand faster into new markets while ensuring compliance and interoperability. With DeFi’s total value locked nearing $150 billion, Spark’s role is vital in positioning PYUSD as a leading on-chain stablecoin.

Spark’s Bootstrapping Blueprint

Spark uses a “bootstrapping blueprint” to build liquidity. After risk assessment, PYUSD was added to SparkLend, Spark’s lending market. Spark then tapped into its $8+ billion capital reserves, deploying liquidity quickly. Currently, Spark is swapping tens of millions of USDC for PYUSD daily, backed by blue-chip collateral to protect participants.

Growing Market and Regulatory Support

Stablecoins are becoming the backbone of on-chain finance, with total supply rising from $235 billion to $263 billion in just three months. MacPherson noted that clearer regulations have attracted more traditional fintechs, saying: “It’s all we ever wanted—rules of the road.”

Spark has already demonstrated its capability at scale, previously deploying $630 million in Bitcoin-backed loans for Coinbase. This track record reinforces Spark’s unique position in bridging fintech and DeFi.

A New Industry Template

With PYUSD now live on Ethereum, the PayPal-Spark partnership highlights how traditional finance and DeFi can work together. It sets a new template for the industry, combining liquidity, compliance, and scalability in one model.