PayPal and decentralized finance platform Spark have teamed up to grow liquidity for PayPal USD (PYUSD) onchain, aiming to scale deposits from $100 million today to $1 billion in the weeks ahead.

PYUSD, issued by Paxos and pegged to the U.S. dollar, was recently onboarded to SparkLend, Spark’s lending marketplace. The integration gives users the ability to supply and borrow PYUSD, with liquidity supported by Spark’s $8 billion stablecoin reserve pool.

This approach contrasts with traditional liquidity programs that rely on expensive market-maker incentives, instead offering predictable depth at set borrowing costs.

“Predictable access to deep liquidity is what allows stablecoins like PYUSD to scale quickly,” said Sam MacPherson, CEO of Phoenix Labs, a Spark contributor. He framed the initiative as a blueprint for how fintech firms can use DeFi to bootstrap adoption of new stablecoins.

The partnership comes as stablecoins see renewed momentum, with global supply climbing nearly $30 billion in three months to $263 billion and daily transaction volumes topping $100 billion.

Spark previously deployed $630 million in on-chain Bitcoin-backed loans to Coinbase.

“With total DeFi value approaching $150 billion, platforms like Spark are crucial to advancing PYUSD as a cornerstone for defi with deep liquidity,” said David Weber, Head of PYUSD Ecosystem, PayPal in a press release.