PayPal Integrates Stablecoin With Polygon as Banks Plan Shared Token
Stablecoins were once issued mainly by crypto-native companies, but traditional financial institutions and technology giants are accelerating their push into the market as demand for digital assets and cross-border payments grows. Stablecoins launched by PayPal and major banks can reduce transaction costs and improve settlement efficiency, while signaling deeper integration between decentralized finance and the traditional financial system. The shift could reshape global payment rails and expose incumbent issuers to formidable competition from traditional finance.
PayPal deployed its PYUSD stablecoin on the Polygon network in July 2026 to lower cross-border payment fees and broaden its use. Meanwhile, more than 140 financial institutions, including Visa, BlackRock and BNY, plan to launch a shared stablecoin called OpenUSD by the end of 2026. The initiative shows traditional banks moving faster to capture a share of the crypto market and is set to put significant competitive pressure on existing issuers.
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The history behind this eventBig Banks Lead On-Chain and Stablecoin Push
American Banker published a banking industry survey in 2026 examining the adoption of on-chain technology and stablecoins. The results show that large banks are ahead of smaller banks and credit unions, with cross-border payments emerging as the primary use case because they could shorten settlement times and reduce intermediary costs.
The latest survey also finds that U.S. national banks are more willing to issue stablecoins than other types of financial institutions, indicating that large banks are moving beyond technology trials and toward payment and digital-asset services. The report discloses no individual investment or transaction amounts, but its 2026 findings confirm that large banks are leading adoption of the technologies.
PayPal Launches PYUSDx for Custom Stablecoin Issuance
PayPal launched PayPal USD (PYUSD) in 2023 as a dollar-backed stablecoin, and PYUSDx turns that asset into infrastructure other businesses can build on. Instead of creating reserve, minting and distribution systems from scratch, developers can issue application-specific tokens fully backed by PYUSD and configure features including branding, rewards and cross-chain behavior. The move broadens PayPal’s role from stablecoin issuer to platform provider as payments companies compete to supply the rails for onchain finance.
PayPal, M0 and MoonPay publicly launched PYUSDx on Sept. 9, 2026, after previewing it in February. M0 built the platform’s token infrastructure, while MoonPay Digital Assets Ltd. handles issuance and MoonPay holds the backing PYUSD reserves. Saturn, Concrete and Cap were live at launch, bringing more than $100 million in processed volume; their products include USDat, concUSD and cUSD. USD.AI and Fairblock are expected to join next, extending the platform across credit, investment and decentralized-finance applications.
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