PayPal expands PYUSD to Arbitrum, ARB price surges 10% in response

PayPal expands PYUSD to Arbitrum in a major move that’s shaking up the crypto space — and traders are already seeing the results.

Within hours of the announcement, Arbitrum (ARB) soared over 10%, making it one of the top gainers in the market.

The expansion signals a strategic leap for both PayPal and the Ethereum Layer-2 ecosystem, giving the US dollar-backed PYUSD stablecoin broader utility and faster, cheaper transaction capabilities.

As investors digest the implications, this development could redefine how mainstream players interact with blockchain infrastructure.

Strategic synergy: Why PayPal chose Arbitrum

At the heart of the rally is PayPal’s decision to add Arbitrum to its PYUSD network — a move that brings scalability and reduced fees to the stablecoin’s ecosystem.

The announcement, released early Thursday, confirmed that the Ethereum Layer-2 scaling network Arbitrum will now support PYUSD transactions, joining Ethereum and Solana.

According to PayPal’s official statement:

“Expanding PYUSD to Arbitrum is part of our long-term vision to offer fast, cost-effective, and widely accessible stablecoin transactions.”

Jose Fernandez da Ponte, SVP of Blockchain and Digital Currencies at PayPal, emphasized the importance of Layer-2 networks:

“Users expect more than just stability from a stablecoin. With Arbitrum’s speed and cost-efficiency, we’re meeting that demand head-on.”

Crypto markets didn’t waste time. Following the news that PayPal expands PYUSD to Arbitrum, ARB’s price surged 10.37% in 24 hours to trade at $0.4395, according to CoinGecko.

This made it the third-highest gainer among the top 60 cryptocurrencies, trailing only PUMP and PENGU.

Market watchers say the jump reflects both speculative momentum and long-term confidence in Arbitrum’s role within the stablecoin and DeFi ecosystem.

How the internet integration benefits users

For crypto users, the Arbitrum-PayPal integration means more than just hype. It brings real-world benefits:

• Lower gas fees compared to Ethereum mainnet

• Faster settlement times

• Wider stablecoin usability across DeFi protocols

Given Arbitrum’s status as the largest Ethereum Layer-2 by Total Value Secured (TVS), this integration ensures PYUSD can scale to meet increasing demand while avoiding Ethereum’s notorious congestion and fee spikes.

This isn’t PayPal’s first foray into Layer-2s. In May 2024, it added Solana support, citing high throughput and cost savings.

According to BeInCrypto, Solana’s PYUSD rollout helped the stablecoin’s market cap surge by 45% in a single month.

Now, PayPal expands PYUSD to Arbitrum in a similar fashion — potentially paving the way for another explosive growth phase.

Cautious optimism: Stablecoin sustainability still in question

Despite the bullish sentiment, not everyone is convinced this expansion guarantees long-term success. Martin Lee, an analyst at CryptoQuant, warned:

“While Arbitrum adds scalability, PYUSD’s growth depends on sustained demand, regulatory clarity, and ecosystem support.”

There are also reminders of past failures like Terra’s UST, though PYUSD is fundamentally different. Unlike algorithmic stablecoins, PYUSD is fully backed 1:1 by U.S. dollars, issued by Paxos under regulatory oversight.

Even so, the stablecoin’s market cap is down 17% from its June 10 peak of $1.01 billion, highlighting the challenges of adoption even with major integrations.

What this means for the crypto landscape

This move adds significant legitimacy to Ethereum Layer-2s and underlines PayPal’s evolving role in the blockchain economy. If the pattern observed with Solana repeats, Arbitrum could become a central hub for stablecoin transactions — helping to decentralize and democratize digital payments further.

As PayPal expands PYUSD to Arbitrum, expect developers to integrate the stablecoin into DeFi lending platforms, DEXs, and payment systems within the Arbitrum ecosystem.

The fact that PayPal expands PYUSD to Arbitrum is more than just headline news — it’s a strategic bet on where the future of stablecoins is headed.

With real-world payments meeting next-gen blockchain tech, this partnership could be a template for legacy fintech embracing decentralized infrastructure.

And if ARB’s 10% price surge is anything to go by, the market has already placed its bet.