PayPal Invests in Stablecoin-Focused Layer 1 Blockchain 'Stable' to Expand PYUSD Ecosystem

PayPal has made a strategic investment in Stable, a layer 1 blockchain designed specifically for stablecoin transactions, as part of efforts to expand the distribution and utility of its PayPal USD (PYUSD) stablecoin. The San Jose-based payments giant's investment follows Stable's completion of a $28 million seed funding round led by crypto exchange Bitfinex and venture capital firm Hack VC.

Stable positions itself as a blockchain infrastructure optimized for stablecoin payments and designed to enhance liquidity and utility for digital dollar transactions. The company recently expanded its leadership team following the substantial seed funding, which also included participation from Franklin Templeton and KuCoin Ventures.

The investment represents PayPal's continued push into crypto infrastructure as it seeks to expand PYUSD's reach beyond its current platforms. PayPal launched PYUSD in August 2023 and has since made it available on multiple blockchains, including a May 2024 expansion to Solana to provide faster and cheaper transactions for consumers. The company has also used PYUSD as a funding instrument for investments, notably in its backing of crypto payments network Mesh.

Stable's $28 million funding round occurred amid favorable regulatory developments in the United States. The funding closely followed passage of the GENIUS Act, landmark U.S. crypto legislation that provides regulatory clarity for digital asset operations. This regulatory environment has encouraged traditional financial institutions to deepen their involvement in crypto infrastructure.

The blockchain industry has seen increased focus on stablecoin-specific infrastructure as digital dollar adoption grows across payments and decentralized finance applications. Stable's approach of building a layer 1 blockchain optimized specifically for stablecoins represents a targeted strategy in this expanding market segment.

PayPal's investment in Stable aligns with broader industry trends toward specialized blockchain infrastructure. Major financial institutions have increasingly invested in crypto infrastructure companies to support their digital asset strategies and expand their reach in emerging financial technologies.

The partnership between PayPal and Stable could potentially accelerate PYUSD adoption by providing optimized infrastructure for the stablecoin's distribution and use cases. However, neither company disclosed specific details about integration timelines or technical implementation plans.