by Coinstrooper Crypto Articles
Quick Take
  • “Spark’s framework proves how DeFi can provide the reliable market foundations that global companies need to bring stablecoins into the mainstream economy.”
  • Spark claims its bootstrapping strategy has created a model for stablecoin growth.
  • Tokens listed on SparkLend undergo rigorous risk assessments before gaining access to institutional-grade markets for supply and borrowing.
  • Borrowing rates are calibrated to be supportive in the early stages, encouraging adoption and driving organic demand.

What Happened

PayPal and Spark, an on-chain asset allocator launched by Sky (formerly MakerDAO), have announced a partnership to expand liquidity for PayPal USD (PYUSD), the U.S. dollar-backed stablecoin.

PayPal USD (PYUSD) is also now live on the Stellar network, announced on Thursday. The launch marks a milestone for both PayPal and Stellar, extending PYUSD’s reach into new wallets, platforms, and business use cases across global payments.

The announcement was made at the Stellar Meridian event in Copacabana, Rio de Janeiro, on September 18, a flagship annual gathering of blockchain leaders, investors, and policymakers.

Market Context

“Predictable access to deep liquidity is what allows stablecoins like PYUSD to scale quickly,” said Sam MacPherson, co-founder and CEO of Phoenix Labs, a core contributor to Spark.

“Spark’s framework proves how DeFi can provide the reliable market foundations that global companies need to bring stablecoins into the mainstream economy.”

Spark’s Liquidity Blueprint

Spark claims its bootstrapping strategy has created a model for stablecoin growth. Tokens listed on SparkLend undergo rigorous risk assessments before gaining access to institutional-grade markets for supply and borrowing.

Capital from Spark’s $8 billion-plus stablecoin reserves is then deployed into the market through the Spark Liquidity Layer (SLL), creating depth and efficient capital allocation. Borrowing rates are calibrated to be supportive in the early stages, encouraging adoption and driving organic demand.

The collaboration comes at a major time for the industry. Stablecoin supply has surged from $235 billion to $263 billion in just three months, with daily transaction volumes now regularly exceeding $100 billion.

Spark explains that it has already demonstrated its ability to manage large-scale liquidity demands, having deployed $630 million in on-chain Bitcoin-backed loans to Coinbase.

With total DeFi value now approaching $150 billion, Spark said it is positioning itself as a key player in building liquidity infrastructure for fintech adoption.

“With total DeFi value approaching $150 billion, platforms like Spark are crucial to advancing PYUSD as a cornerstone for DeFi with deep liquidity,” said David Weber, Head of PYUSD Ecosystem at PayPal.

“By working together, PYUSD can reach new markets faster while maintaining full compliance and composability from day one.”

Building the Next Chapter of DeFi Liquidity

The post PayPal and Spark Forge $1B Liquidity Reserve Deal to Boost Stablecoin Access appeared first on Cryptonews.

Why It Matters

In a press release shared with CryptoNews, the firm explains that since PYUSD was integrated into SparkLend, deposits have surpassed $100 million, with expectations of scaling to $1 billion.

PYUSD, issued by Paxos Trust Company, is fully backed by U.S. dollar deposits and short-term Treasuries. The stablecoin is live on the Ethereum mainnet with cross-chain expansion on the roadmap.

Details

Stablecoins Cement Their Role in Finance

PayPal USD Goes Live on Stellar