What happened?
PayPal has partnered with Spark, an on-chain asset allocator associated with Sky (formerly MakerDAO), to increase liquidity for the PayPal USD (PYUSD) stablecoin. As a part of the collaboration, Spark aims to boost the PYUSD supply by $1 billion in the coming weeks. Since integrating PYUSD into its services, SparkLend deposits have already surpassed $100 million and expectations are high that they will scale to $1 billion.
Who does this affect?
This strategic partnership affects both companies involved, PayPal and Spark, as well as their respective users. In addition, it will impact the broader financial industry, particularly those who use or are interested in using stablecoins, such as PYUSD, which are cryptocurrencies designed to minimize price volatility. Key stakeholders include investors, blockchain leaders, and policymakers who will convene at the Stellar Meridian event where the announcement was made.
Why does this matter?
The collaboration is significant as it comes at a time when the role of stablecoins is becoming increasingly important in finance. Stablecoin supply has surged from $235 billion to $263 billion in just three months, with daily transaction volumes now regularly exceeding $100 billion. The success of the partnership could therefore potentially influence future market trends and policies, underscoring the role of platforms like Spark in providing the necessary infrastructure for deep liquidity in the decentralized finance (DeFi) sector.