Spark has partnered with PayPal to integrate PayPal USD (PYUSD) into SparkLend, bringing the stablecoin into decentralized lending markets and positioning Spark as a major enabler of stablecoin adoption in DeFi.
The integration has already driven significant inflows: PYUSD deposits on SparkLend have surpassed $100 million, with plans to scale that liquidity to $1 billion.
Spark, an on-chain asset allocator launched by Sky (the team formerly known as MakerDAO), applies a formal risk assessment and liquidity framework to tokens before granting access to institutional supply and borrowing markets.
That framework, together with Spark’s Liquidity Layer and more than $8 billion in stablecoin reserves, is used to create market depth and allocate capital efficiently — capabilities that helped PayPal USD gain institutional market access through this partnership.
PayPal USD’s rollout on SparkLend is further aided by its launch on the Stellar network, which expands global rails and on-chain use cases for PYUSD. The combined infrastructure — Spark’s liquidity provisioning and Stellar’s cross-border reach — aims to give PYUSD predictable, deep liquidity, a requirement for stablecoins seeking mainstream corporate and institutional adoption.
Spark’s track record of managing large-scale liquidity needs strengthens its claim as a reliable counterparty for major stablecoin projects. The platform previously deployed $630 million in on-chain, Bitcoin-backed loans to Coinbase, demonstrating experience with sizeable capital movements and complex institutional integrations.
The PayPal–Spark collaboration highlights broader trends in crypto: centralized issuers increasingly rely on DeFi infrastructure to access liquidity and institutional markets, while on-chain allocators like Spark aim to be the plumbing that scales stablecoin use in payments, trading and lending. If PYUSD reaches the targeted $1 billion on SparkLend, it will mark a notable milestone for stablecoin maturation and DeFi’s role in supporting mainstream stablecoin adoption.
