PayPal is partnering with Spark, a decentralized finance (DeFi) protocol, to increase the supply of its stablecoin, PYUSD, to $1 billion in the coming weeks. The collaboration has already helped PYUSD deposits reach $200 million, demonstrating a strong demand for the stablecoin.

The initiative leverages Spark's "stablecoin bootstrapping toolkit," which combines its lending platform, SparkLend, with an automated Spark Liquidity Layer. This framework allows Spark to dynamically inject capital into its lending markets and manage liquidity on major decentralized exchanges (DEXs) like Uniswap and Curve. The goal is to establish deep, predictable liquidity that enables institutional-scale transactions and large swaps against other stablecoins like USDC and USDT.

This partnership provides PayPal a DeFi-native route to rapidly scale PYUSD, moving beyond traditional token-incentive programs. By using sophisticated DeFi infrastructure, PayPal aims to embed its stablecoin as a cornerstone asset in the on-chain economy. The success of this model signals a growing trend of established financial players utilizing DeFi protocols for scalable and efficient liquidity solutions.